Question

Describe the role of the following agency:

- Treasury

Answer 1

The role of Treasury is that of Cash Management.It includes collection, investment, disbursements, and funding activities. It may include trading in stocks, currencies,bonds, financial derivatives etc.It occupies the central role in finances .It ensures availability of cash to meet every need of business operations.Following duties are performed by Treasury-

• Cash Forecasting-It is like budgeting, to plan the requirement of cash and to make sure its availability.
• Working Capital Management-To keep an eye on Working Capital is also a duty of Treasury as it decides the liquidity of a firm.
• cash management- Managing proper cash as per forecast and working capital needs .
• Treasury Risk management-To create Risk management Strategies and implement to mitigate the company's risk it includes- Interest rates , Foreign Exchange Policies, Stock Price, etc
• Fund Raising-To Maintain relations with investors ,brokers , investment bankers, and to plan investement such that it could be easily available at the time needed.
• Bank Relation- Cooperation with bankers is necessary for Foreign Exchange transactions, wire transfers, hedges, cash pooling, etc.