Podcast
Questions and Answers
True or false: The treasury department's responsibilities include cash forecasting and working capital management.
True or false: The treasury department's responsibilities include cash forecasting and working capital management.
True (A)
True or false: The treasury department is only responsible for a company's liquidity.
True or false: The treasury department is only responsible for a company's liquidity.
False (B)
True or false: The treasurer is not responsible for monitoring current and projected cash flows.
True or false: The treasurer is not responsible for monitoring current and projected cash flows.
False (B)
True or false: Working capital management is a key component of cash forecasting and cash availability.
True or false: Working capital management is a key component of cash forecasting and cash availability.
True or false: The treasury department's role is limited to ensuring sufficient cash for primary business operations.
True or false: The treasury department's role is limited to ensuring sufficient cash for primary business operations.
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Study Notes
Treasury Department Overview
- Responsible for managing a company’s liquidity and financial health.
- Monitors current and projected cash flows, special funding needs, and other financial metrics.
- Ensures proper investment of excess funds and prepares for potential borrowings or capital raises.
Key Responsibilities
- Maintains sufficient cash availability for primary business operations.
- Compiles cash information from all subsidiaries for accurate forecasting.
Cash Forecasting
- Involves creating short-range and long-range cash forecasts.
- The treasury department collaborates with accounting to integrate receipts and disbursements into forecasts.
Working Capital Management
- Essential for evaluating cash forecasting and ensuring cash availability.
- Focuses on managing changes in working capital to optimize liquidity and operational efficiency.
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