Corporate Liquidity Management

Cash and Short Term Finance

Alain Rividi – NEOMA BS
Introduction
 ▪ Graduated from Sup de Co Reims (now Neoma-BS), 1980
▪ MBA, University of Illinois at Urbana Champaign, USA, 1982
▪ Career at IBM since 1983
– Sales Engineer
– Financial Analyst, Budget and Planning, Revenue and Costs
– Financial Studies

▪ Jobs in Treasury since 1989

– Cash Manager IBM France
▪ Design of group cash management strategy, implementation of a new
Treasury Management Systems (TMS)
▪ Participation in pan-European treasury centralization
– Treasury Program Manager Europe
▪ Y2K/EURO/SEPA migration management
Alain Rividi ▪ Design development and deployment of a pan-European Payment Factory
▪ Capital Structure and Dividend Policy management
– Leader Documentation Team and SME, Dublin Treasury Centre

▪ Retired May 2020

© Alain Rividi

– Treasurer of France Payments Forum, a professional group

3 A. Rividi, Corporate Liquidity Management – Spring 2024

© Alain Rividi

4 A. Rividi, Corporate Liquidity Management – Spring 2024

© Alain Rividi

5 A. Rividi, Corporate Liquidity Management – Spring 2024

© Alain Rividi

6 A. Rividi, Corporate Liquidity Management – Spring 2024

 Objectives

▪ The Objectives of the module

– Provide a high-level overview of the various operational aspects of Corporate Liquidity
Management.
– Understand the role and activities related to Treasury
– Understand its place in the overall finance organization
– And Its interactions with the rest of the corporate organization
– Develop a Cash Culture that can be applied to every segment of a business
– Get a better understanding of Balance Sheet Management issues
© Alain Rividi

7 A. Rividi, Corporate Liquidity Management – Spring 2024

The Treasurer….
© Alain Rividi

9 A. Rividi, Corporate Liquidity Management – Spring 2024

© Alain Rividi

10 A. Rividi, Corporate Liquidity Management – Spring 2024

Liquidity and Corporate Treasury
An overview

The Main Roles of a Treasury Dept

 Liquidity

▪ 2 ways of looking at Liquidity

– In a Financial Markets perspective, the liquidity of an asset refers to
“ the speed and ease with which an asset can be converted into cash….”
essentials of Corp. Finance, Ross, Westerfield, Jordan, 10th ed

– When referring to a Company

“The notion of corporate liquidity management has since evolved to encompass
not only how firms administer their cash balances, but how they deal with credit
lines, manage their debt capacity, and use derivatives for hedging. Central to this
research is the idea that managers use liquidity as a way to maintain financial
flexibility if their firms should face difficulties securing funds in the capital
markets…” Murillo Campello Reporter 2015
© Alain Rividi

18 A. Rividi, Corporate Liquidity Management – Spring 2024

 What is Treasury ?
© Alain Rividi

19 A. Rividi, Corporate Liquidity Management – Spring 2024

 The Treasurer as a plumber

▪ Most operations ultimately materializes in an actual

movement of funds
Flows ▪ Every organization depends on its capacity to
Management efficiently move funds
▪ Treasury’s role is to efficiently and securely
organize these flows
© Alain Rividi

20 A. Rividi, Corporate Liquidity Management – Spring 2024

 The Treasurer as Buyer
▪ Management of flows requires external partners
like Bankers
▪ Treasurers will select the appropriate partners in
line with their organization requirements
Accounts
Management ▪ Bank Accounts need to be structured in an efficient
organization
▪ Bank/Corporate relationship is complex as Banks
provide a variety of critical services from banking
operations to trade finance, from ST funding to
Equity engineering
© Alain Rividi

21 A. Rividi, Corporate Liquidity Management – Spring 2024

 The Treasurer as Security Guard

▪ By its nature Treasury concentrates a lot of risks that

need to be assessed and managed.
▪ Risks may be internal or external

Risk ▪ Risks can come from many different areas

Management ▪ Each risk needs to be assessed and
▪ A risk management strategy established.
© Alain Rividi

22 A. Rividi, Corporate Liquidity Management – Spring 2024

 Cash Management:
where everything comes together

▪ Cash management is the core of Treasury Operations

▪ A robust and controlled cash management operation is critical
Cash
Management to ensure a proper execution of most of the other Treasury
missions
▪ Cash Management covers a variety of aspects
▪ Cash management requires a proper technical environment
– Treasury Management System
– Legal and contractual organization.
© Alain Rividi

23 A. Rividi, Corporate Liquidity Management – Spring 2024

 Treasury in Perspective

Flows
Management

Cash
Management

Accounts Risk
Management Management
© Alain Rividi

24 A. Rividi, Corporate Liquidity Management – Spring 2024

 Course Plan
▪ Payment and Collection Policies
– How to optimize cash flows in and out of the Company improving efficiency and
reducing cost and risk, in a changing environment (technology, buying behaviour).
▪ Banking Relationship
– The Treasurer and their Bankers

▪ Risk Management
– Different types of Risk
– Focus on some items as illustration
▪ Cash Management
– The daily life in a Treasury Department

▪ Working Capital Management

– How to release resources by optimizing various elements of the Working Capital
© Alain Rividi

25 A. Rividi, Corporate Liquidity Management – Spring 2024

 Additional Course Elements

▪ A video on additional aspects of Treasury is available on Course

▪ Additional Readings
– A treasurer’s Viewpoint: Testimony of François Masquelier, Treasurer of RTL group
for many years and current president of ATEL (Association des Trésoriers d’Entreprise
du Luxmbourg) and Chair of EACT (European Association of Corporate Treasurers)
– Treasury in 2024, What to expect: Describes the main challenges Corporate
Treasurers will expect to face in 2024, base don interviews with Bankers, Providers and
Treasurers.
© Alain Rividi

26 A. Rividi, Corporate Liquidity Management – Spring 2024