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Article: Cash forecasting more challenging: accurately forecasting cash to meet a firm's demands in this economic climate--while keeping both investors and analysts at bay--has become challenging for many treasurers.(WORKING CAPITAL)
- Article from:
- Financial Executive
- Article date:
- May 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 Financial Executives International. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Cash, as the adage goes, is king. But with liquidity constricted by the continuing financial crisis, cash has become as prized by corporate financial executives as water in a desert.
Since the crisis, treasurers can no longer pick up the phone and arrange a quick infusion of cash from commercial paper to address a shortfall in their corporate coffers. Now, treasurers must take great pains to ensure that they have enough cash on hand.
Yet, if they over-forecast their cash needs and end up with more than is optimal, they run the risk of alienating institutional shareholders. Investors may become miffed that this money hasn't been reinvested or, depending ...