Term
| Three Functions that collectively comprise treasury management |
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Definition
1. Liquidity Management
2. Capital Management
3. Risk Management |
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Term
| Four Phases in the Operating Cycle |
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Definition
1. Acquire materials or resources
2. Convert materials to goods, convert resources to services
3.Sell goods or services
4. Collect Payment for goods and services |
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Term
| Describe eight major objectives of treasury management |
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Definition
1. Maintain Liquidity
2. Optimize cash resources
3. Manage Risk
4.Maintain access to short term financing
5. Maintain investments
6. Maintain access to medium and long term financing to support investments in capital assets
7. Coordinate financial functions and share financial information
8.Enhance global & Cross border focus |
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Term
| Describe five sections that can be taken to mitigate risk |
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Definition
1. Add to the number of counterparties to increase diversification
2. Eliminate specific counterparties
3. Implement or adjust a single counterparty balance limits
4. Rebalance liquidity allocations among counterparties
5. Adopt third-party custodian for investments |
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Term
| Describe four methods companies are using to optimize their treasury obligation |
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Definition
1. Improving internal processes
2. Implement new or upgrade technology
3. Adopting new or improved bank/financial services product
4. Outsourcing selected treasury functions |
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Term
| Describe five items that the board of directors must grant to managemenf the authority to do. |
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Definition
1. Open, close,and modify bank accounts
2. Establish borrowing facilifies
3. Oversee investments
4. Issue debt and equity securities
5. Devise, implement and execute risk managemenf strategies through board approved policy statements |
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Term
| Describe six tasks typical to daily funds management |
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Definition
1. Prepare a cash position worksheet
2. Monitoring cash balances on deposit at financial institutions
3. Collecting, concentrating and disbursing cash
4. Investing and borrowing funds on a short term basis
5. Research and reconcile exception reports
6. Coordinate functions with other finance areas, such as accounts receiveable, accounts payable and accounting |
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Term
| Describe eight areas of internal collaboration for treasury department |
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Definition
1. Accounts receiveable
2. Accounts payable
3. Pension management
4. Risk managemenf
5. Internal audit
6. Accountingt0
7. Tax department
8. Purchasing |
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Term
| Describe ten areas of external collaboration for treasury department |
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Definition
1. Financial institutions
2. Third party providers
3. Rating agencies
4. External auditors
5. External investment managers
6. Regulatory agencies
7. Industry trade groups
8. Suppliers and customers
9. Legal counsel
10. Financial markets |
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