《Corporate Finance (公司金融学)》课件 (29)

Mail
Processing
Clearing
float
float
float
Collection float
Overview of Lockbox Processing
Corporate Customers
Corporate Customers
Corporate Customers
Corporate Customers
– 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.
$ When the cash balance reaches the upper control limit H cash
is invested elsewhere to get us to the target cash balance Z.
H
When the cash balance reaches the lower control limit, L, investments are sold
drawn on a bank but on an issuer (the firm) and are payable by the issuer. • The bank acts only as an agent, presenting the draft to the issuer for payment. • When the draft is transmitted to a firm’s bank for collection, the bank must present the draft to the issuing firm for acceptance before making payment. • After the draft has been accepted, the firm must deposit the necessary cash to cover the payments. • This allows the firm to keep less cash on hand.
Chapter Twenty Eight
28 Cash ManagemCeonrptorate Finance Ross • Westerfield • Jaffe Sixth Edition
Sixth Edition
Chapter Outline
28.1 Reasons for Holding Cash 28.2 Determining the Target Cash Balance 28.3 Managing the Collection and Disbursement of
• 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 alone than to manage each account on a daily basis.
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
Implications of the Miller-Orr Model
• To use the Miller-Orr model, the manager must do four things:
1. Set the lower control limit for the cash balance. 2. Estimate the standard deviation of daily cash flows. 3. Determine the interest rate. 4. Estimate the trading costs of buying and selling
4. Mail from distant post office.
5. Mail from post office that requires a great deal of handling.
Drafts
• Firms sometimes use drafts instead of checks. • Drafts differ from checks because they are not
3 Time
C
The Baumol Model
Total cost C K T F
2
C
Opportunity
Costs
C
K
2
Trading costs T F
C*
C
Size of cash balance
The optimal cash balance is found where the opportunity
28.3 Managing the Collection and Disbursement of Cash
• Accelerating Collections • Delaying Disbursements • Disbursement Float • Zero-Balance Accounts • Drafts • Ethical and Legal Questions
Deposit goes to supplier’s bank
Bank collects funds
1. Write check on a distant bank.
2. Hold payment for several days after postmarked in office.
3. Call supplier firm to verify statement accuracy for large amounts.
period we incur a trading
C
cost of F each period. If we need T in total over the
planning period we will
C
pay $F, T ÷ C times.
2
12
The trading cost is T F
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.
Float
• The difference between bank cash and book cash is called float.
• Float management involves controlling the collection and disbursement of cash.
T = The total amount of new cash needed
K = The opportunity cost of holding cash: this is the interest
rate.
If we start with $C,
spend at a constant rate
CK T F
2Leabharlann CMultiply both sides by C
C2 K T F 2
C2 2T F K
C* 2TF K
The Miller-Orr Model
• The firm allows its cash balance to wander randomly between upper and lower control limits.
Z * 3 3Fσ 2 L 4K
H * 3Z * 2L
where s2 is the variance of net daily cash flows.
• The average cash balance in the Miller-Orr model is
Average cash balance 4Z * L 3
Post Office Box 1
Details of receivables go to firm
Local Bank Collects funds from PO Boxes
Envelopes opened; separation of
checks and receipts
Deposit of checks into bank accounts
• The Baumol Model • The Miller-Orr Model • Other Factors Influencing the Target Cash Balance
Costs of Holding Cash