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Cash and Marketable Securities Management: Group 8
Cash and Marketable Securities Management: Group 8
Cash and Marketable Securities Management: Group 8
SECURITIES MANAGEMENT
GROUP 8
INTRODUCTION
OBJECTIVE OF CASH MANAGEMENT
1. Transactions Facilitions
2. Precautionary Motive
3. Compliance with creditors convenant
DETERMINING THE TARGET CASH
BALANCE
• Cash budget
• Cash Break-Even Chart
• Optimal cash balance using
a. Basmol Model
b. Miller-Orr Model
OTHER FACTORS INFLUENCING THE
TARGET CASH BALANCE
- Float
- Disbursement float
- Collections float
• Accelerating cash collections
-Prompt deposit
1. Risks
a. Default risk
b. Interest rate risk
c. Inflanation risk
d. Marketability (Liquidity) risk
e. Event risk
2. Maturity
3. Yield or returns on securities
TYPES OF MARKETABLE SECURITIES