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7/21/2019 FM_Session 8 (1)
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Financial Management (PGDM- 2015-17)
Session-8: Working Capital Management
Sriranga is!n"
#a$"lt% (#&' 'rea)
7/21/2019 FM_Session 8 (1)
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Management of Cash
• Cas! its nees
• *easons +or ,oling Cas!:-
– ransa$tions
– Compensation to .anks +or pro/iing loans
– Pre$a"tionar% moti/es- Cas! o
"$t"ations
– Spe$"lati/e moti/es +or .argain
p"r$!ases
7/21/2019 FM_Session 8 (1)
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Management of Cash
•
'/antages o+ !oling $as! :-
– rae Dis$o"nts
– Goo Creit *atings
– ene3tting +rom +a/ora.le ."siness
opport"nities s"$! as spe$ial o4ers
– Meet $ontingen$ies
• Cas! "get: Cas! inos an o"tos
7/21/2019 FM_Session 8 (1)
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Management of Cash
• Cas! Management e$!ni"es:-
• Cas! #lo S%n$!roni6ation- Coin$iing inos
it! o"tos
• Spee-"p C!e$k $learing pro$ess
• Pa%ment .% ele$troni$ met!os ire trans+ers
(*GS)
• '$$eleration o+ *e$eipt o$al eposits
• #loat Di4eren$e .eteen 3rms .alan$e an
anks .al9
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Management of Receivables
• Monitoring *e$ei/a.les Position - DS
• 'geing S$!e"le ,o long ';$ *e$ei/a.les
are o"tstaning
• Setting Pr"ent Creit Poli$%:-
– Creit erms ( 2;10< net =0)
–
Creit Perio – Creit Stanars C"stomers ort!iness o+ $reit
– Colle$tion Poli$%
–
Cas! Dis$o"nts