Cash Management Enterprise

Cash Management Enterprise

Management is a set of techniques and methods of purposeful influence on an object in order to achieve certain results. An important area of ​​management activity is cash managment jobs. The finances of enterprises of various forms of ownership form the basis of finance. Here the predominant part of financial resources is formed. Enterprises have real financial independence, independently distribute the proceeds from the sale of products, dispose of profits at their own discretion, form production and social funds, research, using, among other things, the resources of the financial market.

At the same time, the responsibility of the enterprise for economic and financial results has also increased significantly. This implies the importance of the activities of the manager of the enterprise’s cash management. The purpose of the study of this topic is to study the essence of the concept of cash, analysis of cash flows, techniques and methods of cash management, planning, forecasting and optimization of cash in the enterprise.

Object of study: cash and cash equivalents, and the regulation of their movement in the enterprise.

Subject of research: systematization of approaches to enterprise cash management.

Course work consists of 3 chapters: introduction; first: theoretical, chapters on the essence of funds, the importance of their regulation in the enterprise and the techniques used in this; the second chapter: the methods of analysis and planning of cash flow and some models used for this are considered; the third chapter: a practical example shows the analysis of financial and economic activities at Malachite LLC, an assessment of cash flows at the enterprise; conclusion and bibliography.


1.1. The concept of cash

The cash of the enterprise is its money in the cash desk of the enterprise, as well as in bank accounts, it is working capital, working capital, which are in the sphere of circulation as a result of the sale of products. Taken in monetary terms, they represent circulation funds. Funds are mainly kept on settlement and foreign currency accounts of the enterprise in banks, since a significant part of the settlements between economic entities is carried out in non-cash form. In small amounts, cash is in the cash desk of the enterprise. In addition, buyers’ funds may be in letters of credit and other forms of payment until they are completed.

Thus, the composition of cash includes cash on hand at the enterprise, cash on settlement and foreign currency accounts, other cash, as well as short-term financial investments.

Cash is the most liquid assets of the enterprise and does not stay for a long time at a certain stage of the circulation of funds. The financial manager is obliged to constantly monitor the state and movement of funds.

The composition and size of monetary assets operated by the enterprise in the course of economic activity solves a number of tasks: current payments associated with operating activities – this goal is served by the operating (or transactional) balance of funds;

Insurance of risks associated with untimely receipt of funds from operating activities and the need to maintain constant solvency for urgent financial obligations – this purpose is served by the insurance (or reserve) balance of funds;

Speculation in the market of short-term financial investments – this purpose is served by the investment (or speculative) balance of funds;

Formation of an irreducible level of monetary assets – this purpose is served by a compensatory balance of monetary assets, which is created in accordance with the terms of an agreement with a bank that provides settlement services and provides various financial services.

The listed types of cash holdings from the position of financial management.

Are interpreted more broadly than in accounting. Short-term financial investments in this case are considered as a form of investment and reserve placement of free cash balance, which at any time can be claimed to pay off urgent financial obligations.

Effective cash management is one of the most important areas of financial management.

Cash flow is the difference between cash received and paid out by a business. Cash flow in which the outflow exceeds the cash inflow is called negative. Cash flow with an excess of inflow is called positive. Cash in itself that is, not invested in a business cannot bring income; on the other hand, the enterprise must always have a certain amount of free funds due to the reasons stated above. This determines the need for a certain (at least the most minimal) systematization of approaches to managing these assets. In general, the system of effective cash management implies the allocation of four blocks of procedures that require a certain attention of a financial manager (analyst): calculation of the financial cycle, analysis of cash flows.

1.2. Cash flow management

Cash flow management is one of the most important activities of a financial manager. It includes the calculation of the time of circulation of funds (financial cycle), analysis of cash flow, its forecasting, determination of the optimal level of funds, budgeting of funds, etc. The importance of this type of asset as cash, according to John Keynes, is determined by three main reasons: – routine – cash is used to perform current operations, since there is always a time gap between incoming and outgoing cash flows, the company is forced to constantly keep free cash on current account;

-Precaution – the activity of the enterprise is not strictly predetermined, therefore, funds are needed to make unforeseen payments.


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