Question

Discuss how a corporate treasurer allocates the firm's cash balance. Consider how a corporate treasurer allocates...

Discuss how a corporate treasurer allocates the firm's cash balance.

Consider how a corporate treasurer allocates the firm's cash balance.

What are the factors taken into account in making the allocation?

Homework Answers

Answer #1

Corporate treasurer allocates cash balances of firm under three main categories which are operating, investing and financing. Operating cash allocation involves allocation of cash for managing working capital requirement of the business so that day to day expenses of the firm are managed easily.

Financing cash allocation involves cash allocated for financing new projects of the company.

Money left after operating and financing allocation is used for investment in stocks or bonds to get higher returns for the company.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Intrepid Plc are proposing to expand their operations to the USA and you as corporate treasurer...
Intrepid Plc are proposing to expand their operations to the USA and you as corporate treasurer have been asked to recommend to the board of directors how you might manage the translation risk in the balance sheet and also how Intrepid Plc can utilise currency swaps as a mean of long term hedging. Question: Advise the board on the operation of a sterling/US dollar swap and discuss any potential problems or drawbacks in utilising currency swaps.
A firm's Cash balance is $6,300,000, Accounts Receivable balance is $6,700,000, Inventory balance is $5,000,000 and...
A firm's Cash balance is $6,300,000, Accounts Receivable balance is $6,700,000, Inventory balance is $5,000,000 and Fixed Assets balance is $21,000,000. The firm's Current Portion of Long Term Debt balance is $3,900,000, Accounts Payable balance is $1,700,000, Long Term Bonds balance is $29,000,000 and Retained Earnings balance is $4,400,000. What is the firm's Long Term Debt Ratio? The answer is 86.83% - I just need to show how to get it
Take a position on which of the accounting reports (e.g., balance sheet, statement of cash flows,...
Take a position on which of the accounting reports (e.g., balance sheet, statement of cash flows, operating break even analysis, etc.) is most important to anyone interested in giving an entrepreneur funding. Support your position. Discuss at what point an entrepreneur should consider calling it quits if the business only breaks even. Consider the factors involved in the decision to support your discussion.
The "Cash" account on Dec 31, 2017 balance sheet show balance of $40,000. Then an accounting...
The "Cash" account on Dec 31, 2017 balance sheet show balance of $40,000. Then an accounting error was found - January 2018 cash disbursements entered as of December 2017 included payments of accounts payable in the amount of $39,900, on which a cash discount of 2% was taken. What does "January 2018 cash disbursements entered as of December 2017" mean? does it mean January 2018 cash disbursement was incorrectly included in the Dec 2017 balance sheet, and therefore to adjust...
48. The salary of a corporate treasurer would be included on the Income Statement in which...
48. The salary of a corporate treasurer would be included on the Income Statement in which of the following cost categories? a. Selling Expense b. Cost of Goods Sold c. 'Other' (non-operating) Expense d. Administrative Expense 49. Edson Co. purchased 100 shares of treasury stock for $50 per share. The company later sold the shares for $55 per share. The entry to record the sale of the shares would include a a. credit to Paid-in Capital from Treasury Stock for...
Explain how each of the following factors would probably affect a firm’s target cash balance if...
Explain how each of the following factors would probably affect a firm’s target cash balance if all other factors were held constant. (3 pts) The firm institutes a new billing procedure that better synchronizes its cash inflows and outflows. The firm develops a new sales forecasting technique that improves its forecasts. The firm reduces its portfolio of U.S. Treasury bills. The firm arranges to use an overdraft system for its checking account. The firm borrows a large amount of money...
You have a $100,000 cash balance in a margin account, how much stock can you buy...
You have a $100,000 cash balance in a margin account, how much stock can you buy with that balance?
Given that a stock price is the PV of the firm’s cash flow, discuss the positions...
Given that a stock price is the PV of the firm’s cash flow, discuss the positions taken by a true believer, firm believer, mild believer and non-believer of the EMT ---- in terms of what/how they believe an investor can exploit the market.
1.) Select a service or manufacturing business and discuss the key factors to consider in locating...
1.) Select a service or manufacturing business and discuss the key factors to consider in locating a new facility. 2.) What data should you collect and how do you collect the data to be able to evaluate your location options?
Commercial paper may show up on corporate balance sheets as either a current asset or a...
Commercial paper may show up on corporate balance sheets as either a current asset or a current liability. Explain this statement. What is the difference between pledging accounts receivable and factoring accounts receivable? What is an asset-backed public offering?    4. Briefly discuss three types of lender control used in inventory financing. 5. What is meant by hedging in the financial futures market to offset interest rate risks? The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT