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.

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