Ch.19: Cash and Marketable Securities Management ISLAS) o 2002 Prentice Hall. Inc
© 2002, Prentice Hall, Inc. Ch. 19: Cash and Marketable Securities Management
Liquid Asset Management Sl CASH- motives for holding cash TRansactions: to meet cash needs that arise from doing business. Precautionary: having cash on hand for unexpected needs. Speculative: to take advantage of potential profit-making situations
Liquid Asset Management CASH- motives for holding cash: • Transactions: to meet cash needs that arise from doing business. • Precautionary: having cash on hand for unexpected needs. • Speculative: to take advantage of potential profit-making situations
Cash Management CASH:
Cash Management CASH:
Cash Management CASH: Trade off: cash decreases risk of insolvency, but earns no returns!
Cash Management CASH: • Trade Off: cash decreases risk of insolvency, but earns no returns!
Cash Management CASH:
Cash Management CASH:
Cash Management CASH: e Obiectives
Cash Management CASH: • Objectives:
Cash Management CASH: e Obiectives have enough cash on hand to meet disbursal needs
Cash Management CASH: • Objectives: • have enough cash on hand to meet disbursal needs
Cash Management CASH: e Obiectives have enough cash on hand to meet disbursal needs Minimize investment in idle cash balances
Cash Management CASH: • Objectives: • have enough cash on hand to meet disbursal needs. • Minimize investment in idle cash balances
Cash Management Managing Cash Inflow Reducing float can speed up cash receipts Mail Float: length of time from the moment a customer mails a check until the firm begins to process it. Processing Float: the time required by a firm to process a check before it can be deposited in a bank
Cash Management Managing Cash Inflow • Reducing Float can speed up cash receipts. • Mail Float: length of time from the moment a customer mails a check until the firm begins to process it. • Processing Float: the time required by a firm to process a check before it can be deposited in a bank
Cash Management Managing Cash Inflow Reducing float can speed up cash receipts
Cash Management Managing Cash Inflow • Reducing Float can speed up cash receipts