INSTITUTE OF PUBLIC ADMINISTRATION AND MANAGEMENT

(University of Sierra Leone)

Faculty of Accounting and Finance

Department of Banking and Finance

Course Title: Treasury Management

Modules content 2023-24 AY

Module Overview:

This module provides a comprehensive understanding of treasury management principles and

practices. Students will explore key concepts in liquidity management, risk mitigation, and
financial instruments to develop effective treasury strategies.

Topic 1: Introduction to Treasury Management

 Definition and Scope of Treasury Management

 Role of Treasury in Corporate Finance

 Historical Evolution of Treasury Functions

Topic 2: Cash and Liquidity Management

 Importance of Cash Management

 Cash Forecasting Techniques

 Liquidity Risk Assessment

  Cash Concentration and Disbursement Strategies

Topic 3: Financial Instruments in Treasury

 Overview of Money Markets

 Understanding Fixed Income Securities

 Derivatives in Treasury (Forwards, Futures, Swaps)

 Currency and Interest Rate Risk Hedging

Topic 4: Risk Management in Treasury

 Identification and Measurement of Financial Risks

 Credit Risk Management

 Operational Risk in Treasury

 Stress Testing and Scenario Analysis

Topic 5: Treasury Policies and Procedures

 Developing Treasury Policies

 Compliance and Regulatory Considerations

 Internal Controls in Treasury Operations

Topic 6: Treasury Technology and Systems

 Treasury Management Systems (TMS)

 Automation in Cash Management

 Cybersecurity in Treasury Operations

Topic 7: Treasury Performance Measurement

 Key Performance Indicators (KPIs) in Treasury

 Benchmarking Treasury Performance

 Evaluating Treasury Efficiency

Topic 8: Corporate Finance and Capital Budgeting

Interest Rate Calculations: Managing interest rate risk involves calculating present value, future
value, and net present value of cash flows to assess the impact of interest rate changes.

Cash Flow Forecasting: Utilizing various forecasting techniques to project future cash flows,
helping optimize liquidity and funding needs.

FX Risk Management: Calculating exposure to foreign exchange risk and determining the
appropriate hedging strategies to minimize potential losses.

Duration and Convexity: Assessing the sensitivity of a portfolio to interest rate changes using
duration and convexity measures.

Liquidity Ratios: Calculating liquidity ratios to evaluate a company's ability to meet short-term
obligations, such as the current ratio and quick ratio.

Working Capital Management: Optimizing the balance between current assets and liabilities to
ensure efficient use of resources and maintain liquidity.

Risk-adjusted Return on Capital (RAROC): Evaluating the return on capital in relation to the
risk taken, helping make informed investment and funding decisions.

Valuation of Financial Instruments: Determining the fair value of various financial instruments,
including bonds, derivatives, and other securities.

Stress Testing: Conducting scenario analysis to assess the impact of adverse market conditions
on the financial position of the organization.
Capital Budgeting: Applying discounted cash flow techniques to evaluate the financial viability
of long-term investment projects.

These calculations are crucial for effective treasury management, helping organizations
optimize their financial resources, manage risks, and make informed strategic decisions.

Topic 9: Case Studies and Practical Applications

 Analyzing Real-world Treasury Scenarios

 Group Discussions on Treasury Challenges

 Guest Speaker Sessions from Industry Experts

Assessment:

Midterm Exam (Week 6)

Group Project: Treasury Strategy Proposal (Week 11)

Final Exam (Week 14)

This outline provides a structured approach to cover essential topics in treasury management,
combining theoretical knowledge with practical applications.