Corporate financing policy: the potential for conflict

Article Abstract:

Most companies rely on the advice of their bankers on the proper type of finance for specific conditions despite the fact that the adviser itself may also be the supplier of the funds. To avoid a likely conflict of interest on the part of the banker, it is advisable to identify beforehand the type of required finance the business needs. The form of finance is subject to the corporate financial strategy, consisting of the five key liability features: gearing and the effect on the equity risk profile, the profile of debt maturity, the interest rate exposure, the foreign currency mix, and the documentation and covenant management. Borrowers are now capable of raising finance appropriate to the business requirements by separately engineering the risk management features with various financial instruments. Once these are accomplished, only then can the banks or capital markets be approached to accomodate the financial instruments that match the needed specifications.

Methods, Prevention, Conflict of interests (Agency), Financial management, Conflicts of interest

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The treasurer and the organisation

Article Abstract:

Corporate treasurers' main jobs include managing investments, cash, risk, and liabilities, but many companies have extended their treasurers' responsibilities. Areas where treasurers are interacting include competitor and marketing analysis; information technology; taxation; and accounting. Treasurers also are enhancing their departments through the application of information technology to decision making, transactions, and manipulation of data. The treasury function overlaps with tax and may often call for tax planning involvement. As a result, treasurers must liaison with financial accounting to ensure that accounting treatments and treasury functions are congruent.

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Forget perfect forecasting

Article Abstract:

The advantages of a good quality cash forecasting systems, such as, ability to plan better for financial levels, identify surplus cash for investment, keep pressure on management to improve working capital, are beneficial for any business house. However, the expensive treasury techniques, and for major companies, the very small difference between their borrowing and deposit rates could cast doubt on the need to implement the perfect cash forecasting system.

United Kingdom, Management dynamics, Cash Management, Financial Forecasting, Forecasting, Management, Evaluation, Company business management, Cash flow, Business forecasting

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