Explain about centralised treasury function, Financial Management

Assignment Help:

Q. Explain about Centralised treasury function?

Treasury departments are usually a feature of larger companies than Frantic although it is perhaps beneficial to consider the benefits of such departments to assess what if any practices might reasonably be adopted. Fundamentally treasury centralisation is an issue concerned with economies of scale. The advantages of treasury departments are numerous and include

- Consolidating bank accounts to create also a single account through which all cash resources are managed or a virtual single account with automatic offset between different accounts. Such an approach maximises put down interest that is typically higher on larger cash balances for positive balances whilst minimising overdraft costs for negative balances.

- Borrowings is able to be arranged in bulk thus accessing lower rates.

- Foreign exchange management is enhanced. In the same manner that cash balances are effectively consolidated then so can foreign exchange risk without the need to enter into expensive hedging agreements. Foreign exchange risk consolidation is a extremely common practice.

- Treasury expertise is able to be developed within a single department thus enhancing the quality of resource management generally.

- Precautionary cash balances while centralised are probable to be lower than when considered on an individual account basis.


Related Discussions:- Explain about centralised treasury function

Hedge fund, Definition of 'Hedge Fund': An aggressively managed portfo...

Definition of 'Hedge Fund': An aggressively managed portfolio of investments that uses advanced investment strategies define as leveraged, short, long and derivative positions

Principle of opportunity cost, Suppose you have recently been contracted as...

Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr

Common-size analysis, Common-size Analysis • Prepare a Common-size Analy...

Common-size Analysis • Prepare a Common-size Analysis for the Balance Sheet and Income Statement • This should include about 12 accounts in the Balance Sheet and about 10 Inc

Estimate the most systematic risk, Yang Su is considering the following inf...

Yang Su is considering the following information on two stocks:                                                                              Rate of Return State of Economy

Increase total revenue, The Australian skiing industry operates out of a ve...

The Australian skiing industry operates out of a very narrow seasonal base-approximately three months in a good season. In a good year, providers of accommodation, ski hire and tow

Show the present value of a single flow, Q. Show the Present Value of a Sin...

Q. Show the Present Value of a Single Flow ? Discounting or else Present Value of a Single Flow (Lump Sum):- We are able to determine the PV of a future cash flow using the for

Treasury bills in international markets, Treasury Bills in International Ma...

Treasury Bills in International Markets A brief discussion on treasury bills in international markets is given below: Primary Market T-bills are important money market

Define factor fx call or put option model price is function, List the argum...

List the arguments (variables) of which a FX call or put option model price is a function.  How does the call and put premium change with respect to a change in the arguments?

Accounting framework - convention of consistency, Accounting Framework  - ...

Accounting Framework  - Convention of Consistency This doctrine denotes that accounting rules, practices & conventions should be continuously observed and applied that implies

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd