CASH AND MARKETABLE SECURITIES MANAGEMENT

CASH AND MARKETABLE SECURITIES MANAGEMENT

CASH MANAGEMENT:

Cash management is a process in which the company decide how much the cash should be reserve by the company for future payments and investment.

There are are two ways in which company manage its cash
Minimum Cash
Maximum Cash

Minimum Cash:
In multinational companies the company reserve its cash for emergencies and future payments

Maximum Cash:
The purpose of reserve the maximum cash by the company is for future investment.

Minimum Cash Factors:

a) Raising cash Quickly when needed

if the company have good rapo in market then its not need to reserve the minimum cash if rapo is not good then keep the reserve.

b) Geographicaly:

if companies have to face more emergencies they should keep the reserve for example japan have earth quick problem they keep more money to see this situation.

c) Predicting Cash Need Factors:
according to future situation of cash inflow or outflow keep reserve
if inflow>outflow  in future not reserve the cash
if inflow<outflow in future then reserve the cash

Factors Affecting the Maximum Cash:

a) Available Investment Projects:

The company will reserve the cash to see the available current investment project suppose company have three project A price is 100000 B price is 50000 and C price is 40000  if company start the only A project only reserve the 100000 money.

b) Rate of Return:

Company will reserve the amount to see the rate of return on project that will received after investment. if the rate of return will more the company will less current reserve and if the rate of return will less the company will keep more current cash reserve.

FINANCIAL MANAGEMENT
DECISION AREA OF FINANCIAL MANAGEMENT
AGENCY PROBLEM
TYPES OF BUSINESS
FINANCIAL SYSTEM
FINANCIAL INTERMEDIARIES
TYPES OF FINANCIAL MARKETS
TIME VALUE OF MONEY
EXAMPLES AND FORMULA TIME VALUE OF MONEY
CASH FLOW,SUM,SERIES OF CASH, ANNUITY AND MIX STREAM
ANNUITY TYPES AND FORMULA
AMORTIZATION SCHEDULE OR TABLE WITH EXAMPLE
EFFECTIVE INTEREST RATE WITH EXAMPLE
VALUATION OF LONG TERM SECURITIES (BONDS)
TYPES OF BONDS
BONDS FORMULA,ZERO COUPON PERPETUAL
VALUATION OF LONG TERM SECURITIES (SHARE)
CASH AND MARKETABLE SECURITIES MANAGEMENT
MANAGING CASH INFLOW AND OUTFLOW
SECURITIES MANAGEMENT
SHORT TERM FINANCING
SPONTANEOUS LABILITIES
NEGOTIATED FINANCE
CAPITAL BUDGETING
CAPITAL BUDGETING TECHNIQUE
NET PRESENT VALUE TECHNIQUE
INTERNAL RATE OF RETURN TECHNIQUE
ACCOUNT RECEIVABLE MANAGEMENT
INVENTORY MANAGEMENT
FORCASTING

MBA NOTES FINANCIAL MANAGEMENT