Treasury management

CHE 670: Engineering Management

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Presented by: Wilasinee Seesongkram
Outline

1. Business cycle

2. Key Role and Importance of Treasury

function
4. Finance statement

5. Treasury management

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Business life cycle

Produced another
product that
Amount of selling product

related old
product
Ex. Media and
Printing rebirth to
digital TV

Prefer Period As long as possible

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Finance and Accounting

Liquidity
management
Budget
planing How much
benefit?
To run project
How much cost?

Strategic
Tax and Map Fund
financial raising
accountin
g
Channel to investment
Financial risk
management
To addition project running
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Liquidity management

Evaluation of Liquidity Risk>>enough cash?

Manage between current asset (cash, inventories) and current liability
“Over-Leveraged” = current liability > current asset

Liquidity : Reduce
gap

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Liquidity management

Revenue cycle - Prefer short cycle

turn to cash fast , get profit & continue invest

Working capital - Working Capital Balancing Act

management

Ensuring current assets

are sufficiently liquid to Investing in less liquid
minimize the risk of assets in order to
insolvency maximize return

Liquidity Profitability

Critical
factor
Timeliness and accuracy data/forecastProper and enough business partners
Be discipline / stringent Proactively explore and make the financial
Utilize more group synergy tools available for use 6
Fund raising Why the company need to raise fund

FINANCIAL ACTIVITIES
- Loan repayment
- Bond redemption
- Dividend payment

INVESTING ACTIVITIES
- Capital expenditure for
new project or expansion

OPERATING ACTIVITIES
- Operation expenses
- Short term debt obligation

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Fund raising

COMPANY

SOURCE OF
USES OF FUND
FUND
PLANT & RAW
INCOME
EQUITY DEBTS EQUIPME MATERIAL/ WAGES
S NT GOODS

SHAREHOLDERS LENDERS CUSTOMERS CONTRACTORS SUPPLIERS EMPLOYEES

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Fund raising -- By debt via intermediary markets

Money Market(bank) Capital Markets

• Short-term credit facilities • Short-term debt securities
( < 1 year ) ( < 1 year )
• short-term loan • Treasury Bill
• Long-term credit facilities • Commercial Paper
( > 1 year ) • Long-term debt securities
• Long-term unsecured loan ( > 1 year )
• long-term secured loan • Bond, Common Stock in SET

Long term unsecured loan • No isolation of risk between projects

• Financial leverage is limited by debt
characteristic
• Limited lenders’ requirement
capacity

Long term secured loan • Capital intensive

characteristic • Long term pay-back period
• Construction risk supported by sponsor
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Fund raising -- Credit ratings
CREDIT
GOOD
JUNK BOND

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Financial risk management

Risk
Market Risk Business Risk

Operation Risk Financial Risk

3 types of risk management

FX Contract,
Foreign Exchange
Natural Hedge/Currency Selection
Risk Management

Interest Rate Risk Hedge / Fixed Rate

Management

Counter Party Risk

Credit Committee
Management
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THANK
YOU
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