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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

7/21/2019 FM_Session 8 (1)

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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