About Treasury

About Treasury

Liquidity Risk
Foreign Exchange Risk
Interest Rate Risk

What is Liquidity Risk Management?

Liquidity risk is the risk that financial commitments can’t be paid on their due dates. Managing liquidity risk requires forecasting cash flows; ensuring there are sufficient funds and/or financing facilities available to meet cash flow deficits; timing payments to coincide with receipts where possible; and maintaining an adequate surplus of liquid assets and/or committed financing facilities to cater for a liquidity crisis.

But problems happen – forecasts are inaccurate; covenants are breached resulting in the withdrawal of committed facilities, crises occur (forecast revenues can evaporate and/or forecast expenses can “blow out”), liquid assets cannot be liquefied as required. Corporate Treasurer’s maintain a liquidity buffer to allow for inaccurate forecasting and liquidity crises.

We assist clients through:

  • Developing, reviewing and refining liquidity policies, buffers and procedures
  • Developing and refining comprehensive cash flow forecasting models that consolidate multi-site and multi-currency forecasts
  • Identifying and utilising “lazy cash”
  • Developing and reviewing strategies to manage working capital, available cash and borrowing needs