YEAR: 4Treasury Management

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10 Νοε 2013 (πριν από 3 χρόνια και 8 μήνες)

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COURSE: Management Module: MN 30067: Semester 1

YEAR: 4


Treasury Management


Objective


The course is designed to take those with an interest in finance into a more detailed study of the day to day
functions of a treasury department than is possible on th
e Financial Management course. The objective is to
allow students to obtain a clear view as to what is involved and to move, without too much difficulty, from a
degree course to a working environment. To this end the course material is developed from the p
erspective
of a corporate treasurer but also makes reference to the viewpoints and practices of international banks.


Course Structure


The basic structure of the course is designed so that, as far as is possible, subjects flow in some logical
sequence. Th
e course will start with a simple, domestic, company problem and then gradually develop the
complexities that arise with growth and a move into overseas markets. See attached for detailed course
structure.


Methodology


The course consists of 11 two
-
hour l
ectures

and one one hour seminar every two weeks
.

Within this
structure, as much open discussi
on as is possible is encouraged

to flesh out the bare bones of treasury
practice. Case studies are used both to familiarise students with the inevitable calculati
ons and

also to extend
the analysis into areas of policy and practice. Students are expected to apply themselves to the problems and
to bring their own ideas, experiences and questions into
the
classroom

and seminar

discussions.


You should all have looked

at the PRI case studies prior to the sessions and be prepared to answer questions
on them.



Assessment


Assessment is by: 2 hour Examination 100%


Reading

There is a course handbook

that covers the majority of the subject matter. This
must

be studied.

It

is
available

on my website as are all overheads and some additional reading.


Recommended additional reading
:

M
ultinational Business Finance 1
3
th


ed by Eitman, Stonehill and Moffett. Pub, Addison Wesley (ref E&S)

Multinational Finance
-
, 5
th

ed Adrian Buc
kley


Also

Inte
rnational Financial Management 4th

Ed, by Eun and Resnick. Published by McGraw Hill

Financial Institutions and Markets, 10
th

edition, Madura

International Finance, A Practical Perspective, Adrian Buckley especially Part E.


US Cash Manageme
nt: A Practical Guide a research report authored by Michele Allman
-
Ward and
published by Treasury Today

ACT International Cash Management, Certificate Paper, course manual. Various years, latest is best! Two or
three copies available in library. Excellent
for lectures 1 to 5.

Note the references may not be accurate
depending on the version you get hold of but it should be obvious! Referred to below as ACTM.



Others:

Guide to Treasury Best Practice and Terminology, FTI and WWCP

ISBN 1 899518 08 8


Practical

Forecasting for Managers, by John C and Mary M Nash, pub by Arnold

Corporate Finance, Peter Moles, Robert Parrino and David Kidwell


The Treasurer, the official Journal of the Association of Corporate Treasurers.

Treasury Today at
www.treasurytoday.com



Gtnews.com

V
ery good for current articles on treasury issues. Mainly free.


Lecturer
:

Mr Anthony BIRTS. ACT Cert ICM, BSc, MBA

Extension 3675

Room WH 8.56

Email mnsanb@management.bath.ac.uk



Guest Lecturer:
D
r Elena Veprauskaite

for sessions 6,7 and 8


Treasury Management

MN30067

Course Outline

Oct 2013


Session 1

Introduction


a) The Role of The Treasurer


b) Treasury Management


c) Cash Management


-

Definition




i)

Domestic

Cash Manage
ment




Payables and Receivables Management



PRI Case A pti



PRI Case A ptii



ACT CertICM manual Chs 1
-
4 (ACTM)



ii)

Money movement

Float, Finality, Value Dating and Repudiation.

ACTM Chs 6 to 10

Reading:

Course book

Chs 1
-

3

www.apacs.org.uk/


For
all sessions see articles on my website

Practice:
Seminar 1. Work on the Consys case and be ready to discuss it.


Lockbox problem


Session 2

Part A


Cash Management: Account Structures


PRI Case B


PRI

Case C




i)



Account Structures


When and where to open accounts


ii)

Some t
ypes of accounts

-

Lockbox



-

Zero Balance

-

Controlled Disbursement

-

Remote disbursement

-

Intervention account



Reading

Course book: Ch 4

E&S Ch
1
9




AC
TM Ch 5

and 11for accounts and 22.

Session 2

Part B


Foreign Exchange Exposure Management (FX)



Introduction to Foreign Exchange Risk Management


-

Definition of Exposures

-

Reading FX rat
es

Course Book: Ch 5


E & S Ch 9
-
12


Practice
:

Seminar
2

1)
Case Study : Primrose and Percy


2) Reading FX rates practice



Session 3


See Boughtright problem

before this session
.



Basic ways to cover exposu
re

-


Reading FX Rates and Money Market Rates

-


Linkage between FX and money markets


-


Decisions based on

cash flow



Other considerations







Case study: PRI Case D


Reading Co
urse book
: Chs

6



E & S Chs 6
-
8

And Chs 1
-
5

if time

Buckley Chs 4 to 9 and 10


Practice:

Seminar 3. Schokolardentorten

part i)


Session
4
.
FX continued
.


Short
-
term currency swap
s


Tiering and banding

Reading

Course book
: Ch 7

E & S Ch 4 and 14


Practice:

Schoko part ii)

plus Swap practice 1 and 2


Also
Seminar 4. Question i
)


Session 5
.
FX continued

again
.


i)

Foreign Exchange Options


ii)

Forecasting


Reading

Course book
: Ch 8

Buckley Ch 17

E & S Ch 5



Practice:

Seminar 4. Q
uestion ii)


Session 6

Enterprise Risk Management


The lecture will provide a

short introduction to ERM and the role of
the
treasurer in ERM. Specifically it
will cover the following areas:



Definition of ERM



Framework of
ERM



Differences between ERM
and tra
ditional risk management



Benefits of ERM



The role of
the
Treasurer in ERM.


Reading:

Robert R. Moeller
. (2007). C
OSO enterprise risk
management understanding the new integrated ERM
framework
. John Wiley & Sons, New Jersey

(Ch. 1., 2., 3).

Association of Corporate Treasurer. (2006).
The Role of Treasurer in the Enterprise Risk Management
.
Mercer Oliver Wyman & The Association of Corporat
e Treasurer, London

Mikes, A. (2005).
Enterprise Risk Management in Action
. ESRC Centre for Analysis of Risk and
Regulation, London.


Session
s

7

and 8



Interest Rate Risk Management


-

Forward Forward Money

-

Futures

-

FRAs

-

Interest Rate Swaps

-

Caps

and Collars


Reading:



Course book Ch 9





Practice:

Seminar 5. Interest rate risk











Session
9

i)

Pooling, cash concentration and interest enhancement.


ii)

Cash Flow Forecasting


iii)

Some short term funding and investment issues



Reading: Course book
,

Ch 4
for

pooling etc
.

F
or cash flow forecasting
,

ACTM Ch 13

and look at C
h
17 for pooling
etc and
18

for tax implications. Chs 14 and 15 for short term investment and
funding


Practice:

Seminar 5
b
,

Qs 1
-
4 for interest Qs and

Q 5

for forecasting





Session 10


i)

Centralisation Issues


-

Netting (if not dealt with earlier!)


-

Re
-
invoicing


-

Factoring


-

Payment factories


-

Shared service centres


-

In
-
House Bank

ii)
Managing the Treasury function


-

Policy


-

Procedures

-

Performance

-

Setting Limits


Reading: Course notes

Ch10 for netting, ACTM

Ch 16 f
or netting and

Ch 20

for Treasury Organisation

Practice:


Netting problem



Session 11

Revision
.

i)

Everything not covered so far

ii)

Revision. Everything covered so far

iii)

Questions you may have


Practice:

Week 11 seminar Qs, mixed batch


Reading:

Everything not read so far or if you have read everything
,

read it again if you did not understand it.