Role of Treasury the Role Essay

Excerpt from Essay :

The treasury works with the IT department to develop means of transmitting information to the managers with regards to risk management strategy and the firm's financial position. Thus, the way the treasury prepares and disseminates information can also contribute to better strategic decisions and cost reductions throughout the organization.

While the treasury is a supporting component of the organization, it is one that can add a significant amount of value. The treasury manages money and it manages the firm's total risk as well. By reducing risk, the treasury reduces the costs associated with doing business and stabilizes the firm's profits and cash flows. This in turn gives management greater flexibility with regards to setting and executing strategy, resulting in greater exploitation of opportunities.

In understanding the degree to which the treasury is central to an organization's success, it must be considered what the outcomes might be if the treasury does not perform well. These outcomes -- increased costs, the inability to raise capital affordably and financial constraints on strategy execution -- will all result in diminished performance and profits. Because of this, the treasury influences all aspects of the company's operations, indicating the key role that the treasury plays in the organization's success.

Works Cited:

Duong, H. (no date). Introduction to treasury management. Deakin University.

San Jose, L., Iturralde, T., Maseda, A. (2008). Treasury management vs. cash management. International Research Journal of Finance and Economics. Vol. 2008 (19) 192-204.

Pan, L. (2006). Fine-tuning cash portfolios through liquidity management. Financial Executive. Retrieved March 27, 2010 from http://www.thefreelibrary.com/Fine-tuning+cash+portfolios+through+liquidity+management-a0151653038

Loth, R. (2010). Evaluating a company's capital structure. Investopedia. Retrieved March 27, 2010 from http://www.investopedia.com/articles/basics/06/capitalstructure.asp

Oglivie, J. (1999). Treasury management: Tools and techniques for countering financial risks. London: Chartered Institute of Management Accountants.

Belongia, M. & Santoni, G. (1984). Hedging interest rate risk with financial futures: Some basic principles. Federal Reserve Bank of St. Louis. Retrieved March 27, 2010 from http://research.stlouisfed.org/publications/review/84/10/Hedging_Oct1984.pdf

No author. (2009). Managing cash, commodity, and credit risk in treasury operations. PriceWaterhouseCoopers. Retrieved March 27, 2010 from http://www.pwc.com/en_GX/gx/automotive/issues-trends/pdf/managing-treasury-operations.pdf

Sources Used in Document:

Works Cited:

Duong, H. (no date). Introduction to treasury management. Deakin University.

San Jose, L., Iturralde, T., Maseda, A. (2008). Treasury management vs. cash management. International Research Journal of Finance and Economics. Vol. 2008 (19) 192-204.

Pan, L. (2006). Fine-tuning cash portfolios through liquidity management. Financial Executive. Retrieved March 27, 2010 from http://www.thefreelibrary.com/Fine-tuning+cash+portfolios+through+liquidity+management-a0151653038

Loth, R. (2010). Evaluating a company's capital structure. Investopedia. Retrieved March 27, 2010 from http://www.investopedia.com/articles/basics/06/capitalstructure.asp

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