Cash Management参考.ppt

Chapter Outline 28.1 Reasons for Holding Cash 28.2 Determining the Target Cash Balance 28.3 Managing the Collection and Disbursement of Cash 28.4 Investing Idle Cash 28.5 Summary Conclusions 28.1 Reasons for Holding Cash Transactions motive Compensating balances 28.2 Determining the Target Cash Balance The Baumol Model The Miller-Orr Model Other Factors Influencing the Target Cash Balance Costs of Holding Cash The Baumol Model F = The fixed cost of selling securities to raise cash T = The total amount of new cash needed K = The opportunity cost of holding cash: this is the interest rate. The Baumol Model F = The fixed cost of selling securities to raise cash T = The total amount of new cash needed K = The opportunity cost of holding cash: this is the interest rate. The Baumol Model The Baumol Model The Miller-Orr Model The firm allows its cash balance to wander randomly between upper and lower control limits. The Miller-Orr Model Math Given L, which is set by the firm, the Miller-Orr model solves for Z and H Implications of the Miller-Orr Model To use the Miller-Orr model, the manager must do four things: Set the lower control limit for the cash balance. Estimate the standard deviation of daily cash flows. Determine the interest rate. Estimate the trading costs of buying and selling securities. The model clarifies the issues of cash management: The best return point, Z, is positively related to trading costs, F, and negatively related to the interest rate K. Z and the average cash balance are positively related to the variability of cash flows. Other Factors Influencing the Target Cash Balance Borrowing Borrowing is likely to be more expensive than selling marketable securities. The need to borrow will depend on management’s desire to hold low cash balances. Compensating Balance Firms have cash in the bank as a compensation for banking services. Large corporations have thousands of accounts with several dozen banks—sometimes it makes more sense to leave cash alon