Business Administration - Accounting & Financial Planning FIN401 Chapter Notes - Chapter 7: Money Market Fund, Cheque Clearing, United States Treasury Security
21 Jan 2018
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Document Summary
Maintain optimum level of cash, use the float, speed up collections, extend disbursements, use cash budgets, financial managers want to keep cash balances to a, there are 2 main reasons for holding cash. Cash management minimum for everyday transactions (main reason) for precautionary needs (emergencies) Others- speculative, financial: goals are to speed up the inflow of cash (or improve collections) and slow down the outflow of cash (or extend disbursements, also will attempt to play the float . Keep safety level in cash, invest the excess. Low-risk, liquid investments: savings accounts, money market funds, term deposits, treasury bills, us $ deposits. Earn small return on excess funds: creating and managing float. Managing float process so that they can use their cash for longer. Payers attempt to create delays in the cheque clearing. Recipients attempt to remove delays in the cheque clearing.
