Cash Management Comparison - 1107 Words

Cash Management Comparison Many organizations make a financial goal to minimize the amount of cash on hand on a monthly basis. This goal is based on attempting to reduce the amount of non-earning assets for the company. Cash on hand that is not required to meet a specific need could be placed in an interest bearing account or used to pay down on a credit balance, also reducing the amount of interest a company would have to pay on a loan. â€Å"Minimizing cash balances as well as having accurate knowledge of when cash moves into and out of the company can improve overall corporate profitability.† (Block Hirt, 2004, pg. 175). As companies find a need to supplement business financial goals, obtaining credit or loans on a short-term basis is†¦show more content†¦186) Similar in concept to T-Bills, but different in the length of term are the Treasury Notes. â€Å"Treasury notes are government obligations with a maturity of 1 to 10 years, and they may be purchased with sh ort- to intermediate-term funds.† (Block Hirt, 2004, pg. 186) After federal government securities the next tier risk wise is federal agency securities. Examples include Federal Home Loan Banks and the Student Loan Marketing Associations that lack the â€Å"direct backing of the U.S. Treasury, they are guaranteed by the issuing agency and provide all the safety that one would normally require.† (Block Hirt, 2004, pg. 187) Non-governmental securities provide the most amount of risk but also carry the possibility for the highest return of the three categories described. â€Å"Certificate of deposit (CD), offered by commercial banks, savings and loans, and other financial institutions. The investor places his or her funds on deposit at a specified rate over a given time period as evidenced by the certificate received.† (Block Hirt, 2004, pg. 187) â€Å"Comparable in yield and quality to large certificates of deposit, commercial paper represents unsecured promisso ry notes issued to the public by large business corporations.† (Block Hirt, 2004, pg. 187) With the deregulation of financial institution money market accounts, which are modeled after moneyShow MoreRelatedFinancial Research Report On Financial Management1711 Words   |  7 PagesStericycle Beginning as a medical waste management system, Stericycle (SRCL) got its start in 1989 at Lake Forest, Illinois after Congress passed the Medical Waste Tracking Act of 1988. Today, SRCL is the largest domestic provider of regulated medical waste management to large-quantity generators (such as hospitals and pharmaceutical companies) and small-quantity generators (such as medical and dental offices). 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Cash on hand that is not required to meet a specific need could be placed in an interest bearing account or used to pay down on a credit balance, also reducing the amount of interest a company would have to pay on a loan. â€Å"Minimizing cash balances as wellRead MoreBudgeting Is A Essential Component Of The Operations Of Any Business907 Words   |  4 Pages the monitoring, as well as, the management of the current assets is a requirement needed to ensure the appropriate flow between the income and the liabilities of this business (Branch and Lingo, n.d.). Current assets consist of numerous elements, such as cash, as well as, equivalents of cash. 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