Treasury Operations and Control.
Expert-defined terms from the Graduate Certificate in Treasury Management course at HealthCareStudies (An LSPM brand). Free to read, free to share, paired with a professional course.
Accounting #
Accounting
Accounting is the process of recording, summarizing, analyzing, and reporting fi… #
It involves the preparation of financial statements such as the balance sheet, income statement, and cash flow statement.
Accounts Payable #
Accounts Payable
Accounts payable is the amount of money a company owes to its suppliers or vendo… #
It represents a liability on the company's balance sheet.
Accounts Receivable #
Accounts Receivable
Accounts receivable is the amount of money owed to a company by its customers fo… #
It represents an asset on the company's balance sheet.
Asset #
Asset
An asset is anything of value that is owned by an individual or entity #
Assets can be tangible, such as cash, inventory, or property, or intangible, such as patents, trademarks, or goodwill.
Audit #
Audit
An audit is a systematic examination of a company's financial records, processes… #
An audit is a systematic examination of a company's financial records, processes, and controls to ensure accuracy, compliance with laws and regulations, and sound financial management practices.
Balance Sheet #
Balance Sheet
A balance sheet is a financial statement that provides a snapshot of a company's… #
It shows the company's assets, liabilities, and shareholders' equity.
Budget #
Budget
A budget is a financial plan that outlines the expected revenues and expenses of… #
It helps in setting financial goals, allocating resources, and monitoring performance.
Capital Expenditure #
Capital Expenditure
Capital expenditure refers to the funds spent by a company to acquire, upgrade,… #
These expenditures are typically significant and have a long-term impact on the company's operations.
Cash Flow #
Cash Flow
Cash flow is the movement of money in and out of a company over a specific perio… #
It is crucial for assessing a company's liquidity, solvency, and overall financial health.
Cost of Capital #
Cost of Capital
The cost of capital is the rate of return required by investors to invest in a c… #
It represents the cost of financing for a company and is used to evaluate the profitability of new projects or investments.
Credit Risk #
Credit Risk
Credit risk is the risk of loss due to a borrower's failure to repay a loan or m… #
It is a significant concern for companies that extend credit to customers or counterparties.
Currency Risk #
Currency Risk
Currency risk, also known as exchange rate risk, is the risk of loss due to fluc… #
It affects companies that engage in international trade or have foreign currency-denominated assets or liabilities.
Derivative #
Derivative
A derivative is a financial instrument whose value is derived from an underlying… #
Common types of derivatives include futures, options, swaps, and forwards.
Financial Statement #
Financial Statement
A financial statement is a formal record of a company's financial activities, pe… #
The main types of financial statements are the balance sheet, income statement, and cash flow statement.
Foreign Exchange #
Foreign Exchange
Foreign exchange, or forex, is the market where currencies are traded #
It is the largest and most liquid financial market in the world, with trillions of dollars exchanged daily.
Hedging #
Hedging
Hedging is a risk management strategy used to offset potential losses from adver… #
It involves taking an offsetting position to reduce or eliminate risk exposure.
Internal Controls #
Internal Controls
Internal controls are policies, procedures, and processes implemented by a compa… #
They help in preventing fraud, errors, and misuse of resources.
Interest Rate Risk #
Interest Rate Risk
Interest rate risk is the risk of loss due to changes in interest rates #
It affects companies that have exposure to interest rate-sensitive assets or liabilities, such as loans, bonds, or investments.
Leverage #
Leverage
Leverage refers to the use of borrowed funds to increase the potential return on… #
It amplifies both gains and losses and is a common strategy used by companies to finance growth or acquisitions.
Liquidity #
Liquidity
Liquidity refers to the ease with which an asset can be converted into cash with… #
It is essential for a company's financial stability and ability to meet short-term obligations.
Market Risk #
Market Risk
Market risk is the risk of loss due to changes in market prices or conditions #
It includes risks related to fluctuations in interest rates, exchange rates, commodity prices, and stock prices.
Net Present Value (NPV) #
Net Present Value (NPV)
Net present value is a financial metric used to evaluate the profitability of an… #
It calculates the present value of future cash flows minus the initial investment cost.
Operating Cash Flow #
Operating Cash Flow
Operating cash flow is the cash generated or used by a company's core business o… #
It reflects the company's ability to generate cash from its day-to-day activities.
Receivables Management #
Receivables Management
Receivables management is the process of monitoring and collecting payments owed… #
It involves credit policies, invoicing, collections, and aging analysis to optimize cash flow and minimize bad debts.
Risk Management #
Risk Management
Risk management is the process of identifying, assessing, and mitigating risks t… #
It involves analyzing risks, developing strategies to manage them, and monitoring their effectiveness.
Working Capital #
Working Capital
Working capital is the difference between a company's current assets and current… #
It represents the funds available for day-to-day operations and is crucial for maintaining liquidity and financial stability.