现金管理英文版hsol

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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
28-1
28.1 Reasons for Holding Cash
• Transactions motive • Compensating 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
• Borrowing
– 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.
2
12
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The opportunity cost
3 Time
of holding C is C K 22
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28-5
The Baumol Model
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
28-2
28.2 Determining the Target Cash Balance
• The Baumol Model • The Miller-Orr Model • Other Factors Influencing the Target Cash Balance
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
McGraw-Hill/Irwin
The trading cost is T F
28-0
Chapter Outline
28.1 Reasons for Holding Cash 28.2 Determining the Target Cash Balance 28.3 Managing the Collection and Disbursement of
Cash 28.4 Investing Idle Cash 28.5 Summary & Conclusions
28-10
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.
Z to raise cash to get
us up to the target
L cash balance.
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Time
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
28-9
The Miller-Orr Model Math
• Given L, which is set by the firm, the Miller-Orr model solves for Z and H
Z * 3 3Fσ 2 L 4K
H * 3Z * 2L
where s2 is the variance of net daily cash flows.
28-4
The Baumol Model
F = The fixed cost of selling securities to raise cash
T = The total amount of new cash needed
K = The opportunity cost of holding cash: this is the interest
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
28-3
Costs of Holding Cash
Costs in dollars of holding cash
Trading costs increase when the firm must sell securities to meet cash needs.
rate.
If we start with $C,
spend at a constant rate
each period and replace
C
our cash with $C when
we run out of cash, our
average cash balance
C
will be C .
2
F = The fixed cost of selling securities to raise cash
T = The total amount of new cash needed
K = The opportunity cost of holding cash: this is the interest rate. As we transfer $C each
2. Estimate the standard deviation of daily cash flows.
3. Determine the interest rate.
4. Estimate the trading costs of buying and selling securities.
• The model clarifies the issues of cash management:
• Float management involves controlling the collection and disbursement of cash.
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
3 Time
C
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28-6
The Baumol Model
Totartunity Costs C K
2
Trading costs T F
C2 K T F 2
C2 2T F K
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C*
2TF K
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28-8
The Miller-Orr Model
• The firm allows its cash balance to wander randomly between upper and lower control limits.
to the variability of cash flows.
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28-11 Other Factors Influencing the Target Cash Balance
• The average cash balance in the Miller-Orr model is
McGraw-Hill/Irwin
4Z* L Average cash balance
3
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Total cost of holding cash
Opportunity Costs The investment income foregone when holding cash.
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Trading costs
C*
Size of cash balance
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
C*
Size of cash balance C
The optimal cash balance is found where the opportunity
costs equals the trading costs
C*
McGraw-Hill/Irwin
2T F K
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
• 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.
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28-12
Float
• The difference between bank cash and book cash is called float.
– The best return point, Z, is positively related to trading costs, F, and negatively related to the interest rate K.
– Z and the average cash balance are positively related
28-7
The Baumol Model
The optimal cash balance is found where the opportunity costs equals the trading costs
Opportunity Costs = Trading Costs
CK T F
2
C
Multiply both sides by C
28-13 28.3 Managing the Collection and Disbursement of Cash
• Accelerating Collections • Delaying Disbursements • Disbursement Float • Zero-Balance Accounts • Drafts • Ethical and Legal Questions