Premium Essay

Method of Optimization Cash Flow

In: Business and Management

Submitted By vladimir7293
Words 11703
Pages 47
MINISTRY OF EDUCATION AND SCIENCE OF THE REPUBLIC OF KAZAKHSTAN
ALMATY MANAGEMENT UNIVERSITY
SCHOOL/FACULTY “SCHOOL OF FINANCE AND MANAGEMENT”
DEPARTMENT “FINANCE, ACCOUNTING AND AUDITING”
SUBJECT – FINANCIAL MANAGEMENT

TERM PAPER “Methods of optimization of cash flows of the company”

Done by: Klimov Kirill
4rt year student,
Finance, 1202

Checked by: d.ec.sc.,Yelubayeva Zh.M.

Almaty, 2015
CONTENT

INTRODUCTION 3 1. FINANCIAL AND ECONOMIC ESSENCE OF CASH 4 1.1 Definition and classification of cash flows 4 2. OPTIMIZATION OF CASH FLOWS ON THE EXAMPLE OF THE COMPANY LLP “BASHLAK TRANS EXPRESS ALMATY” 16 2.1 General characteristic of activity 16 2.2 Cash flow analysis of LLP "BASHLAK TRANS EXPRESS ALMATY" 17 3. OPTIMIZATION OF THE SYSTEM IMPROVEMENT OF CASHFLOW AT THE ENTERPRISE 25 CONCLUSION 29 REFERENCES 30

INTRODUCTION

In a modern economic situation one of the most important conditions of a survival and development of the enterprise is existence and rational use of monetary funds. In such circumstances, one of the key problems of the financial analysis is to define and maintain an optimal size and structure of the invested capital in a monetary form in order to obtain the maximum amount of cash flow over a certain period and the rational organization of settlements.
In the conditions of the competition and unstable environment it is necessary to react quickly to deviations from normal activity of the enterprise. Cash flow management is the tool with which you can achieve the desired results of the enterprise - profit. These circumstances determined the choice of research topic.
The…...

Similar Documents

Premium Essay

Wcm- an Overview

...- an Cash Management Cash Reducing working capital levels Well-capitalized companies are positioned not only to survive the financial crisis today, but also to emerge victorious and thrive when skies turn blue again. Establishing and adhering to tight working capital standards enables a firm to continue its operations with sufficient funds to both satisfy maturing short-term debt and meet upcoming operational expenses. Liberating Laura Greenberg I t is no surprise that many companies are staggering under the burden of today’s financial crisis. Even the most optimistic executives see no near-term signs of improvement. Cash is tighter than it has been in decades, and we are seeing companies struggling to attain sufficient liquidity during the ongoing credit crunch. Many have already taken action to reduce capital spending across the board, while others are gearing up to do so. www.AFPonline.org AFP Exchange I 49 Copyright ©2009 by the Association for Financial Professionals. All rights reserved in all countries. Cash Management 2008B CTPs & CTPAs Working Capital Management (WCM)—front and center The current financial crisis has elevated decision-making related to working capital and short-term financing to top-of-mind for today’s executives. Although working capital is a simple concept, managing it is made difficult by the complexity of the business around it. A focus on short-term earnings without concurrent discipline on cash and working capital has......

Words: 2228 - Pages: 9

Premium Essay

Minimizing Working Capital

...optimistic executives see no near-term signs of improvement. Cash is tighter than it has been in decades, and we are seeing companies struggling to attain sufficient liquidity during the ongoing credit crunch. Many have already taken action to reduce capital spending across the board, while others are gearing up to do so. Well-capitalized companies are positioned not only to survive the financial crisis today, but also to emerge victorious and thrive when skies turn blue again. Establishing and adhering to tight working capital standards enables a firm to continue its operations with sufficient funds to both satisfy maturing short-term debt and meet upcoming operational expenses. Cash Management Reducing working capital levels Laura Greenberg Cash Liberating Copyright ©200 9 by the Association for Financial Professionals. All rights reserved in all countries. 50 I AFP Exchange April 2009 2008B CTPs & CTPAs Working Capital Management (WCM)—front and center The current financial crisis has elevated decision-making related to working capital and short-term financing to top-of-mind for today’s executives. Although working capital is a simple concept, managing it is made difficult by the complexity of the business around it. A focus on short-term earnings without concurrent discipline on cash and working capital has deflected the attention of many companies from the basics, where “cash is king.” As a result of the global nature of large......

Words: 2243 - Pages: 9

Premium Essay

Lawrence Sports Inc.

...leading to major cash flow problems downstream. This paper will look at Lawrence’s financial problem and create a working capital policy that will address their cash management needs for the long-term. Situation Analysis Issue and Opportunity Identification Lawrence Sports’ principle customer, Mayo Stores, is having a difficult time paying for the products on time. The current payment arrangement is that Mayo will pay 20% on purchases and 80% the following week. Mayo depends principally on this revenue from Mayo and it finds itself not being able to live up to the agreements made to their agreements to both creditors and suppliers. The only viable option detailed in the scenario is borrowing from Central Bank. Their plan is to borrow a daily loan for any amount to keep the account minimum of $50,000. Lawrence has reached the maximum amount that can be borrowed, which is $1.2 million. Lawrence cannot afford to keep using the bank to bail them out during the low peak times of cash conversion usually occurring in the last few weeks of March. Using Central Bank to finance their operations has negative consequences. First, Lawrence has to come up with $1.2 million at 16% interest to bring the total to $1,392,000 and they are capped out. As mentioned above, the reason for the bank borrowing is that the company has one major source of income and not enough capital to meet the needs of their cash......

Words: 3076 - Pages: 13

Premium Essay

Project Management

...2. DIFFERENCE BETWEEN PERT AND CPM MODEL: CPM and PERT (Program Evaluation and Review Technique) are most commonly used methods for project management. There are some similarities and differences between PERT and CPM. PERT can be applied to any field requiring planned, controlled and integrated work efforts to accomplish defined objectives. On the other hand, CPM (Critical Path Method) is the method of project planning consisting of a number of well defined and clearly recognizable activities. PERT | CPM | PERT uses event oriented network. | CPM uses activity oriented network. | Estimate of time for activities are not so accurate and definite. | Durations of activity may be estimated with a fair degree of accuracy. | It is used mostly in research and development projects, particularly projects of non-repetitive nature. | It is used extensively in construction projects. | Probabilistic model concept is used. | Deterministic concept is used. | PERT is basically a tool for planning. | CPM can control both time and cost when planning. | In PERT, it is assumed that cost varies directly with time. Attention is therefore given to minimize the time so that minimum cost results. Thus in PERT, time is the controlling factor. | In CPM, cost optimization is given prime importance. The time for the completion of the project depends upon cost optimization. The cost is not directly proportioned to time. Thus, cost is the controlling factor. | | | 3. Capital Asset......

Words: 2376 - Pages: 10

Premium Essay

Pdf, Doc

...South-Eastern Europe Journal of Economics 2 (2006) 129-146 EXCHANGE RATE RISK MEASUREMENT AND MANAGEMENT: ISSUES AND APPROACHES FOR FIRMS MICHAEL G. PAPAIOANNOU, Ph.D. International Monetary Fund Abstract Measuring and managing exchange rate risk exposure is important for reducing a firm’s vulnerabilities from major exchange rate movements, which could adversely affect profit margins and the value of assets. This paper reviews the traditional types of exchange rate risk faced by firms, namely transaction, translation and economic risks, presents the VaR approach as the currently predominant method of measuring a firm’s exchange rate risk exposure, and examines the main advantages and disadvantages of various exchange rate risk management strategies, including tactical vs. strategical and passive vs. active hedging. In addition, it outlines a set of widely-accepted best practices in managing currency risk and presents some of the main hedging instruments in the OTC and exchange-traded markets. The paper also provides some data on the use of financial derivatives instruments, and hedging practices by US firms. JEL Classification: F31, G13, G15, G32, M21 Keywords: Financial Risk, Financial Management, Foreign Exchange Hedging, Corporate Hedging Practices Corresponding address: 700 19th Street, N.W. Washington, DC 20431 e-mail: mpapaioannou@imf.org This paper draws heavily on various presentations on risk management while the author was the Director of......

Words: 7210 - Pages: 29

Premium Essay

International Finance

...operations of MNCs and issues surrounding these corporations. Hedging Transaction Exposure Four of the Hedging Techniques Available To MNCs Hedging simply means minimizing or mitigating the effect of the exchange rate exposure. This risk is of three types namely, translation exposure, economic exposure and transaction exposure (Luo, 2001). A transaction exposure is a form of foreign exchange risk which results to loss or gains when operations are carried out or denominated in foreign currency (Hill, 2005). It is a short-term exposure that arises as a result of fluctuations in exchange rates. To mitigate or hedge the effects of this risk, an MNC can use any of the following four techniques. When selecting the method to apply, MNCs compare the expected cash flow from each one of these. A).Futures Hedge- to lock in the future exchange rate, a futures hedge uses currency futures. For smaller amounts of money, standardized futures contracts are used (Haley, 2001). A futures contract is a form of a standardized forward contract where the participants agree to sell or buy the underlying asset. This contract involves specifying a future date and a price to conduct the transaction via a specified exchange. Hedgers trade futures contracts on exchanges which set standardized terms of quantity, quality, date, price quotation and the place of delivery if in case of commodities (Drabek, 2013). The cost of hedging will be none if futures hedge is unbiased protectors. B).Forward......

Words: 4490 - Pages: 18

Premium Essay

Cost Control in Design Process of China’s Construction Project

...Cost Control in Design Process of China’s Construction Project Abstract As the ruthless competition in China’s construction industry, construction project requires a win-win method to acquire the maximal benefit and simultaneously to maintain the quality for keeping the place with the market. One method commended, cost control, especially in the design process, plays a very important role in the project procedure and financial management. This article presents the main implements of cost control utilizes in different aspects of construction and certain skills to control cost in design processes of construction project. These implements and skills could be very helpful for China’s construction companies to optimize their design process and offer beneficial influence to the following steps, increases the percentage of successful project in all projects; thereby to promote the development of the company and the whole industry. Key words: Design Process; Construction project; Cost control 1. Introduction Nowadays in China, the competition within construction industry is continuously increasing, and the profit spaces are limiting. As all the investment always expect for the maximal benefit, if a company want to keep the profit and position in the market in such complicated environment, the best method for it is applying cost control to the project. Cost control in financial management is an important aspect of project management over the whole life of projects.......

Words: 2554 - Pages: 11

Premium Essay

Agree

... PROGRAMME STRUCTURE FOR ISBE (PG) |S No |Subject |Credit | |1. |Business Statistics |3 | |2. |Operations & Optimization Research |3 | |3. |Economics for Managerial Decision Making – II |2 | |4. |Management Information System & KM |2 | |5. |Human Resource Management |2 | |6. |Financial Management |2 | |7. |Executive Communication |6 | |8. |National Economic Planning – I (Presentation Only) |2 | |9. |National Economic Planning - II |2 | BUSINESS STATISTICS (As......

Words: 1759 - Pages: 8

Premium Essay

Competitive Landscape & Beginning Literature Review

...fund and study particular firms that are part of the investment fund to understand the technology blind-side risks within those firms. A major part of it is to build a successful trading strategy. “In finance, a trading strategy is a fixed plan that is designed to achieve a profitable return by going long or short in markets. The main reasons that a properly researched trading strategy helps are its verifiability, quantifiability, consistency, and objectivity” [1]. Currently we have two trading strategies combined together. The first strategy is called Polynomial Regression Strategy, which uses mathematical method to calculate the high degree polynomial regression line. Based on the trend we could find the signals to buy or sell stocks. The second trading strategy is called Discounted Cash Flow method, which is a part of fundamental analysis strategy. It uses future free cash flow to discount them back to arrive at a present value, which is used to evaluate the attractiveness for a potential investment. However, there are so many different strategies in the world except for what we are working on right now. The most popular five trading strategies are as following: Mean Reversion In the world of technology analysis, moving average is one of the most popular and widely used indicators. What started with the simple moving average and then towards exponential moving average has with the passage of time and advent of computer programmed software's have made technicians to......

Words: 1440 - Pages: 6

Free Essay

Fixed Income Portfolio Management

...fixed-income portfolio of corporate and government bonds, industrial loans and credit derivatives, is less well-understood. The fixed-income portfolio problem presents unique challenges: the risk of issuer default induces skewed return distributions, the correlation of defaults influences the tail of the portfolio return distribution, and credit derivative positions have complex risk/return implications. This paper addresses the static selection problem for a fixed-income portfolio. We optimize the total mark-to-market value of the portfolio at the investment horizon. This value incorporates the intermediate premium and default cash flows of long and short cash and derivative positions, and the survival-contingent market value of these positions at the horizon. The selection problem is cast as a polynomial goal program that involves a two-stage constrained optimization of preference weighted moments of the portfolio mark-to-market. The decision variable is the vector of contract notionals. A capital constraint guarantees the solvency of the investor. The multi-moment formulation addresses the non-Gaussian distribution of the portfolio mark-tomarket. It is also computationally tractable, because we obtain analytical expressions for the moments of the portfolio mark-to-market, which are given in terms of nested expectations under risk-neutral and actual probability measures. The expressions are valid for a broad class of intensity-based, doubly-stochastic models of correlated......

Words: 19189 - Pages: 77

Premium Essay

Technology

...Objectives * • Develop an expansive online presence through the use of pay per click marketing and search engine optimization. * • Develop promotional giveaways that will draw users to the website via viral marketing methods. * • Establish relationships with advertisers that are targeting a computer savvy younger demographic. 5.2 Marketing Strategies Mr. Doe intends to use a high impact marketing campaign that will generate a substantial amount of traffic to www.mysite.com. These strategies include the use of search engine optimization and pay per click marketing. Additionally, conventions, technology and advertising trade shows, online advertising activities, sales development and viral marketing campaigns will follow carefully orchestrated strategies by marketing personnel in conjunction with marketing experts. Timely coverage of the Social Networking Website will be further directed through ongoing press relations, news releases and feature stories targeted at key Internet content communities and other media outlets. The Company’s web development firm will place large amounts of linking text on the Company’s website. For instance, when a person does a Google search for social networking websites, the Company will appear on the first page of the search. This strategy is technically complicated, and the Company will use a search engine optimization firm to develop the Company’s visibility on a non-paid basis. Management expects that a SEO firm will place large......

Words: 1869 - Pages: 8

Premium Essay

Supply Chain Risk Management

...selected journals relevant to supply chain operations management. Meanwhile, citation/co-citation analysis uses Web of Sciences database to disclose SCRM development between 1995 and 2009. Both the approaches show similar trends of rising publications over the past 15 years. This review has piloted us to identify and classify the potential risk associated with different flows, namely material, cash and information flows. Consequently, we identify some research gaps. Even though there is a pressing need and awareness of SCRM from industrial aspect, quantitative models in the field are relatively lacking and information flow risk has received less attention. It is also interesting to observe the evolutions and advancements of SCRM discipline. One finding is that the intellectual structure of the field made statistically significant increase during 2000–2005 and evolved from passively reacting to vague general issues of disruptions towards more proactively managing supply chain risk from system perspectives. & 2010 Elsevier B.V. All rights reserved. 1. Introduction Production in the early years was simple, with single flow of products moving from raw material suppliers, to manufacturers and then to markets. Nowadays, shorter product lifecycle and increasing demand among all have led to a complicated supply chain. Due to cost pressure and competitive advantages, companies are adopting globalization and outsourcing strategies. This also requires an extended supply chain network, hence......

Words: 8250 - Pages: 33

Premium Essay

Financial Analysis of Thomas Cook

...liquidate now; it will have enough cash and liquid assets to meet only 40% of its liabilities. Table 2 presents the liquidity ratios for Thomas Cook during the period 2007 – 2011. 3.3. Stability Ratios The stability ratio analysis indicates that the company has financed 40% of its assets through debt and 60% of its assets through equity. An optimal capital structure usually involves debt to equity proportion of 60% to 40%. However, if the debt ratio is very high it can lead to increased volatility in earnings. In terms of company’s debt burden, the interest coverage ratio of the company has come down to approximately 1.5 times in recent years as compared to 4.19 times in 2007 and 2.27 times in 2008. This indicates that the company has improved its position to meet its interest expenses and is generating sufficient revenues to fulfill its interest obligations. 3.4. Investment Performance Ratios The investment performance analysis of Thomas cook shows that the company’s stock is trading at a very high price given its earnings per share. In 2011, the company posted a loss of £521 million and therefore the PE ratio of the year 2011 is meaningless and cannot be included in the analysis. 3.5. DuPont Analysis For the purpose of conducting financial analysis, the DuPont analysis was also carried out to analyze the area that is underperforming and affecting the returns of the company. The return on equity through DuPont method is The ROE for the company has......

Words: 2399 - Pages: 10

Premium Essay

The Goals and Objectives of Tsc

...Foreign) - Remodeling (Service / Wholesale) - Price optimization / Service stores - Assortment optimization - New channels (Online store) - Competition defense and reaction plan 2- Enhance customer service - Improve customer service Low Cost: 1- Every Day Low Price – EDLP - Wholesale concept – EDLP - Price optimization / Wholesale stores - Repositioning (Customer value chain) 2- Low cost operator - Product life cycle management Operational: 1- Supply chain “Pull” strategy (retail specific) - Improve methods and tools for managing demand / supply performance - Improve supply chain planning development and review processes - Auto-Replenishment based on sales (Customer demand) - Improve products and service availability 2- Effective and efficient SOP’s - Standardize SOP’s and policies across countries / companies - Establish a cultured centered on operational excellence - Improve assessment and benchmarking of business process performance - Improve / refine store operations procedures 3- Collaborative supplier relationship - Establish a collaborative planning program with suppliers - Prioritize suppliers 4- Powerful risk management - Develop what if scenarios plan for any major development to keep the business running and safe - Develop and leverage political relationships and alliances - Define contingency and disaster recovery plans Finance: 1- Operational self Funding Companies - Efficient cash management IT: 1- Leveraging systems......

Words: 1526 - Pages: 7

Premium Essay

Asia Pacific Aviation Competitive Challenges & Growth Dynamics

...information modeling; Construction project; Time-cost-quality trade-off optimization; Genetic algorithm. Abstract. With the development of BIM technology, BIM provides a new direction for the project management of three objectives. Based on the current situation of the project time cost-optimized mass balance studies, pointing out the implementation mechanism of achieving the trade-off of time-cost-quality in construction project based on BIM mainly oriented components of the BIM model based; the use of Structured Query Language query statistics data information needs combined bill of quantities calculation method for the specification, preliminary engineering scale generation; establishment of Project relations system model. In the process duration is subject, for the construction of uncertainty factors such as interest rates and prices, through the establishment of quality, cost and schedule function, the establishment of quality balanced schedule cost optimization model, using genetic algorithm model of the optimal solution are obtained. With BIM case finally proves the rationality of the model and the effectiveness of the proposed genetic. 1. Introduction Balance between the three objectives of the optimization problem has also been a research scholar in the field of project management focus at home and abroad, as early as 2005 EI-Rays on the proposed project schedule cost optimization of the quality of discrete model (TCQTP), 2008 Mr Yeung Hung et al.......

Words: 2798 - Pages: 12