The document discusses the role and responsibilities of a company's treasury department. It defines treasury management as the day-to-day management of a company's short-term financial resources. The treasury department is responsible for cash forecasting, working capital management, cash management, investment management, treasury risk management, providing management advice, maintaining credit rating agency relations, and managing bank relationships. The treasury department monitors cash flows, ensures sufficient liquidity to meet operational needs, and advises management on financial policies and market conditions.

1. TREASURY
MANAGEMENT
Presenting by:
SAMIN SOHAIL
20181-23959
Course: Principles of Risk Management

2. TREASURY MANAGEMENT
• Treasury generally refers to the funds and revenue at the disposal of the
bank and day to day management of the same.
• The art of managing, within the acceptable level of risk, the consolidated
fund of the bank/firm optimally and profitably is called Treasury
Management.
• The Treasury department is responsible for a company’s liquidity.
• The treasurer must monitor current and projected cashflows .
• The Treasurer must monitor the internal processes and decisions that cause
changes in working capital and profitability.
• Treasurer needs to maintain key relationships with investors and lenders.
• A treasurer must have proper information for the investment of funds as
well as be prepared for additional borrowings or capital raises.

3. Difference between Finance Department
and Treasury Department
• Treasury management is a subset of financial management; focused on
the day-to-day management of an organization's short-term financial
resources while Financial management deals with the overall financial
management of an organization and its long-term financial planning.
• Treasury management manages an organization's cash and liquidity,
including cash forecasting, short-term borrowing and lending.
• Financial management involves financial planning and control,
including budgeting, forecasting, and analysis of financial performance.

4. Role of Treasury Department
• Cash Forecasting
• Working Capital Management
• Cash Management
• Investment Management
• Treasury Risk Management
• Management Advice
• Credit Rating Agency Relations
• Bank Relationships

5. Cash Forecasting
• A key component of cash forecasting and cash availability is working capital,
which involves changes in the level of current assets and current liabilities
• A treasure should be aware of working capital levels and trends and advise
management on the impact of proposed policy changes on working capital
levels.
Working Capital Management
• The treasurer complies all the accounting transactions to forecasts short
range and long range cash forecasts. These forecasts are needed for
investment purposes.
• These forecasts helps treasurer to determine when more cash is needed
so that he can plan to acquire funds through debt or equity.

6. Cash Management
• The treasury staff uses the information it obtained from its cash
forecasting and working capital management activities to ensure that
sufficient cash is available for operational needs.
Management Advice
• The treasurer monitors market conditions constantly, and therefore is an
excellent in – house resource for the management team to know about
interest rates that a company is likely to pay on new debt offerings and
availability of debt.

7. Treasury Risk Management
• The interest rates that a company pays on its debt obligations may vary
directly with market rates, which present a problem if market rates are
rising.
• A company’s foreign exchange positions could also be at risk if exchange
rates suddenly worsen.
• In both cases, the treasury staff can create risk management strategies
and implement hedging tactics to mitigate the company’s risk.
Investment Management
• The treasury staff is responsible for the proper investment of excess
funds and to not put funds at risk, and also to match the maturity dates
of investments with a company’s projected cash needs.

8. Credit Rating Agency Relations
• When a company issues marketable debt, it is likely that a credit rating
agency will review the company’s financial condition and assign a credit
rating to the debt.
• The treasury staff responds to information requests from the credit agency’s
review team and provides it with additional information over time.
Bank Relationships
• A long – term and open relationship can lead to some degree of bank
cooperation if a company is having financial difficulties, and may
sometimes lead to modest reductions in bank fees.

9. THANKYOU!