Pregunta
upstudy study bank question image url

Section II: Essay and Problem Questions (attempt all questions) (15 Marks) QUESTION 1: In-corporates, treasury overlaps the financial management function, although the former has the more specific focus mentioned, while the latter is a broader field. Analyze treasury management, financial functions of treasury, and decentralized treasury management with its advantages and disadvantages. (3 Marks)

Ask by Hanson George. in Saudi Arabia
Mar 09,2025

Solución de inteligencia artificial de Upstudy

Respuesta verificada por el tutor

Responder

**Treasury Management Explained** *Treasury management* is about handling an organization's money, like making sure there's enough cash for daily operations and investing extra funds wisely. It includes tasks such as managing cash flow, finding ways to get money, and protecting against financial risks. *Financial functions* of treasury management involve: - **Liquidity Management:** Ensuring there's enough cash when needed. - **Funding and Investment:** Securing money from different sources and investing extra funds. - **Risk Management:** Protecting against risks like changes in interest rates or foreign exchange. - **Bank Relationship Management:** Working with banks to get credit lines and other financial services. - **Cash Forecasting:** Predicting future cash needs to plan for financing and investments. *Decentralized Treasury Management* means that treasury functions are spread out among different parts of the company instead of being in one central department. **Advantages:** - **Local Expertise:** Each part of the company can better understand its specific needs. - **Faster Decisions:** Decisions are made quicker without needing central approval. - **Improved Responsiveness:** Can quickly respond to local opportunities or needs. **Disadvantages:** - **Less Control:** It's harder to keep an overall view of the company's finances. - **Inefficient Resource Allocation:** Surplus funds in one area might not be used where needed. - **Increased Complexity:** Requires better communication and coordination, which can be hard. *In comparison to broader financial management*, which includes budgeting and long-term planning, treasury management focuses more on short-term liquidity and risk. So, while treasury is a part of financial management, financial management covers more areas. **Summary:** Treasury management is a specialized part of financial management that ensures the company has enough cash and manages financial risks effectively. Decentralizing treasury can make decisions faster and more responsive but can also make it harder to control and manage resources efficiently.

Solución

¡Inicia sesión para desbloquear respuestas gratis!

Una plataforma de aprendizaje en la que confían millones de estudiantes y profesores reales.

star-icon Descubrir

Respondido por UpStudy AI y revisado por un tutor profesional

Beyond the Answer

Treasury management plays a crucial role in ensuring an organization has sufficient liquidity to meet its obligations while optimizing the return on investments. This includes cash flow management, managing banking relationships, and risk management associated with foreign exchange and interest rates. Effective treasury management aligns with the overall financial strategy, allowing organizations to invest surplus funds wisely and minimize financial risks through careful forecasting and analysis. Decentralized treasury management can empower local managers to make financial decisions that align closely with the operational needs of a specific division or region. However, while it promotes agility and responsiveness, it may lead to inconsistencies in financial policies and expose the organization to greater risks if not properly coordinated. Striking the right balance between centralized oversight and decentralized execution can enhance financial performance while maintaining control over budgetary and financial outcomes.

preguntas relacionadas

Latest Economics Questions

¡Prueba Premium ahora!
¡Prueba Premium y hazle a Thoth AI preguntas de matemáticas ilimitadas ahora!
Quizas mas tarde Hazte Premium
Estudiar puede ser una verdadera lucha
¿Por qué no estudiarlo en UpStudy?
Seleccione su plan a continuación
Prima

Puedes disfrutar

Empieza ahora
  • Explicaciones paso a paso
  • Tutores expertos en vivo 24/7
  • Número ilimitado de preguntas
  • Sin interrupciones
  • Acceso completo a Respuesta y Solución
  • Acceso completo al chat de PDF, al chat de UpStudy y al chat de navegación
Básico

Totalmente gratis pero limitado

  • Solución limitada
Bienvenido a ¡Estudia ahora!
Inicie sesión para continuar con el recorrido de Thoth AI Chat
Continuar con correo electrónico
O continuar con
Al hacer clic en "Iniciar sesión", acepta nuestros términos y condiciones. Términos de Uso & Política de privacidad