Cash And Liquidity Management Homework Help
What is Cash and Liquidity Management Assignment Help in Accounts?
Are you new in this field of accounts and commerce? You must have been given cash and liquidity management projects. But if one doesn’t know the basic concept of cash and liquidity, it will be hard for him to do the projects. Well, there is absolutely nothing to worry about. My Homework help has brought before you the awesome team of cash and liquidity management assignment help. We are not only your teachers but also your friend to whom you can share problems related to topics
What is cash and liquidity management?
It is the basic of accountancy where cash management helps one to understand how firms manage the flow of cash and also understand the flow of cash within the economy of a country. It also understands how to accelerate these collections of cash and also manage the disbursing of cash.
Not only this, cash flow also understands the features of many short term securities in the economic market. Maintaining the market research and understanding the flow of cash while researching is also very necessary here.
Two definitions of liquidity management
Depending on liquidity’s definition, there are primarily two forms of liquidity management in finance. One definition of liquidity management is the ability of trading an asset like a bond or stock at its present price. Our experts can provide cash and liquidity management homework help and help you understand the basic definition.
Another definition of liquidity management is primarily applicable to large organizations like a financial institution. Mostly, evaluation of banks is done based on their liquidity, or their ability of meeting collateral and cash obligations without any major loss. With both definition, managers’ and investors’ efforts for reducing exposure to liquidity risk is described by liquidity management.
Business liquidity management
Lenders, managers and investors use liquidity management ratios while looking at financial statements of a company for evaluating risk. For this, the short-term liabilities and liquidity assets are compared. The excessively leveraged companies have to take steps for reducing the gap between their debt obligations and cash on hand.
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Liquidity risk is faced by all governments and companies having debt obligations, however it is the major banks whose liquidity undergoes particular scrutiny. Since they are economically important institutions, these organizations face strict regulations and tests for assessing their liquidity management. Accounting techniques are used for assessing the need for financial obligations to meet collateral or cash.
Investment liquidity management
When you take cash and liquidity management assignment help from us, you will learn about the liquidity management used by investors for evaluating the bonds or stocks of a company. Companies trading assets can’t do so at any point of time. Sellers and buyers are dependent on each other for that.
If a buyer is unable to find seller at the present price, the buyer has to raise the bid for convincing a seller to sell their asset. Similarly, sellers might have to reduce their asking price for attracting buyers. The assets that can’t be exchanged at the present price are said to be illiquid.
Traders and investors perform liquidity management by focusing mainly on liquid markets. Learn all this and more by hiring our cash and liquidity management homework help.
What are the reasons behind holding the cash?
Cash and liquidity management assignment help says that there are various roles which cash plays so as to hold its assets. They are as follows:
- Motive of speculation is the prime reason which is known to hold the cash so that advantage can be taken of opportunities that are not expected.
- There is a precautionary motive too which is said to hold the cash when in emergency.
- Then you have the transaction motive which holds cash so that the daily bills can be paid off easily.
- There is off trade market where cost of opportunity of cash holding is relative to the cost of transaction which helps one to convert the securities of market towards cash in case of transactions.
Not only this, there are various floats taught by our teachers in cash and liquidity management homework help.
Nature of cash management
Cash is a company’s most liquid asset. Generally, it has been seen that the corporate assets that a company holds amounts to about 1-3% of the amount of cash held by the company. Since cash is the most liquid asset, it is highly suitable for the purpose of business.
Need for cash management
There is an immense need for cash as well, and there are some motives behind the demand of cash management. You can learn about the need for cash management through our online cash and liquidity management assignment help. Cash management is primarily required for:
Transaction purposes:
The need of cash for transaction purposes can be explained as the main operational purpose of any company. The funds income from different sources and its disbursement into different avenues generally don’t match. This is why companies are required to have some cash in the form of a buffer for running the operations.
Speculative purposes:
Companies often try making profits from fluctuations in market prices of investment options such as securities. If the company has enough fund reserves, they have the flexibility
Precautionary purposes:
Organizations also use reserves of cash for protecting themselves from the different kinds of risks that are associated by flow of cash.
Cash management aspects
Following are the primary aspects of cash management:
- Optimal cash balance
- Cash budgeting
- Long term forecasting of cash
- Surplus funds investment
- Reports for control
- Cash disbursement and collection
- Cash management models
To know more details about these aspects, you can seek cash and liquidity management homework help from our online tutors.
What are the floats?
Well, cash flows have three types of floats that help one in running the business smoothly.
One must be thinking as to what the float is? Float is the difference in cash balance of cash account and the cash balance in bank account systems. There is disbursement float which generates when a particular firm draws cheques, there is collection float, which receive the cheques in book balance, then you have net float that is the sum of disbursement float and collection float.
Optimizing cash and liquidity management
Cash and liquidity management is something that happens through day to day operations of a company. It requires continuous improvement of all the systems and processes of cash management involved. This ensures an optimal and cost-effective liquidity management solution.
- Ensuring complete and updated visibility of the cash balances
- Enhancing liquidity extraction from working capital
- Improving the predictability of cash flow
- Maximizing the return on or release of trapped cash
- Improving and refining liquidity concentration
- Optimizing cash surplus investment and cash deficit funding.
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