1. CASH MANAGEMENT BY-

2. CASH MANAGEMENT Cash management is concerned with the managing of: – cash flows into and out of the firm, – cash flows within the firm, and – cash balances held by the firm at a point of time by financing deficit or investing surplus cash

3. Four Facets of Cash Management Cash planning Managing the cash flows Optimum cash level Investing surplus cash

4. Managing Cash Collections and Disbursements Accelerating Cash Collections – Decentralised Collections – Lock-box System

5. Case of Simpson’s Scuba Inc. Current no coordinated cash management system Cash-acceleration plan proposed that involves both a lock-box system and concentration bank.

6. COST ANALYSIS OPPORTUNITY COST – FUNDS FREED*RATE OF INTEREST=$504000 – SAVING IN EXPENSES=$48000 TOTAL $552000 COST OFPROPOSED NEW SYSTEM –CHEQUE PROCESSING COSTS$29700 –COST OF ATDC $7560

7. RECOMMENDATION Its annual gain is (Opportunity cost - cost of new system)=$514740 ACCEPT THE NEW SYSTEM

8. THANKS ANY QUERIES!