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Cash Forecasting

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Bray branch will be in the first phase of our retail project. Cash Forecasting ' ... To maximise interest earnings / reduce borrowing costs. Liquidity ... – PowerPoint PPT presentation

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Title: Cash Forecasting


1
Cash Forecasting
  • Jimmy Doyle
  • Treasury Director
  • Bank of Scotland

2
Bank of Scotland Retail
  • Bray branch will be in the first phase of our
    retail project

3
Cash Forecasting
  • Equity is blood Dr. Michael Smurfit
  • Cash is King- almost everybody else !

4
Cash Forecasting
  • To maximise interest earnings / reduce borrowing
    costs
  • Liquidity management
  • FX risk
  • Financial control
  • Monitoring setting strategic objectives
  • Capex budget
  • Working capital

5
Cash Forecasting-maximise interest income /
reduce borrowing costs
  • Identify periods of cashflow surplus / shortfall
  • Plan your payments
  • Negotiate flexible deposits / overdrafts with
    your bank
  • Use set-off / zero balancing

6
Cash Forecasting Liquidity management
  • The aim of cash management is to provide the
    company with sufficient liquidity to function
  • When assessing surpluses / deficits note the
    amounts, currency,and period in which they will
    arise
  • Move funds between divisions / subsidiaries etc.

7
Cash Forecasting FX Risk
  • Plan separately in each currency
  • Identify the flows within the currency
  • Mach the flows against opposites within the
    currency or-
  • Hedge

8
Cash Forecasting Financial Control
  • Model your Payables and Receipts against
    Purchases and Sales
  • This can be to identify mismatches between credit
    to customers and credit from suppliers. This, in
    turn, identifies your funding requirements

9
Cash Forecasting Monitoring setting Strategic
objectives
  • Compare actual cashflows of specific projects or
    business units against plan
  • Use results as input into corporate strategy and
    objective planning

10
Cash Forecasting Capital Expenditure
  • Cashflow projections determine whether the
    company is generating enough cash for Capital
    expenditure.
  • Can force the decision of Debt vs. Equity

11
Interest Rate Outlook 2006
  • rates will rise by 0.25 next week and will
    peak at 3.0 by end 2006
  • Stg rates will remain at current levels for
    most of 2006
  • rates will continue to rise and will peak at
    5.0 by end 2006
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