Issue Four 2008
While long-term profitability is an important goal, the use of short-term surplus cash is also a key challenge for treasurers. Although companies will wish to maximise the yield generated by surplus cash, they must also take into account the need to keep sufficient funds accessible in order to meet short-term obligations. In this issue’s Cash Management article, we look at how treasurers can use short-term investments to manage surplus cash as efficiently and effectively as possible.
The management of many different types of risk is, of course, a key challenge for treasurers, and FX risk is an area that can be particularly challenging in the China market. As the renminbi strengthens, multinational companies may find the value of their US dollar assets is at risk. In response to a question raised by one of our readers. In this issue we explore the challenges faced by treasurers in tackling FX risk when hedging is not permitted by their headquarters. This can be found in our Question Answered section.
FX risk management and the use of surplus cash represent two challenging aspects of treasury, but companies are also under pressure to ensure the proper integration of treasury within the business to maximise efficiency and ultimately, profits. In this issue’s Treasury Management article we discuss the advantages and disadvantages of the various treasury models as well as the importance of tailoring the treasury structure to the business.
Meanwhile, taking a more international focus, some interesting changes are taking place in the European payments industry. One of these is the Single European Payments Area (SEPA), which was launched in January 2008. We provide an overview of what this means and summarise the three SEPA payment instruments in Finance A-Z.
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