CORPORATE FINANCE

Session 08

Cash management

Main textbook for the course : Ross, Westerfield, Jordan

Presentation of chapter 20 of the book

The reasons for holding cash

Keynes ideas

Compensating balances

Cost of holding cash

The concept of float :

• disbursement float (favorable)

• collection float (unfavorable)

Measuring the net float

Cost of float

Ethical and legal questions

Electronic data interchange

Cash concentration and collection