Question

Q2. What duties does a company treasurer typically perform?

Q3. Identify and discuss the causes of the financial crisis that peaked in autumn of 2008. Why did it get worse?

Answer 1

The company's treasury department is an offshoot of the accounting department. The duties performed by a company treasurer are as follows:

1. Investing Decision: The treasurer is responsible for identifying the most suitable investment opportunities for a business. This decision is related to the deployment of funds.

2. Financing Decision: The treasurer must help take the capital structure decision of the firm. It must decide on the amount of equity and debt to be applied to the firm in order to minimize the cost of capital, and increase the shareholders' wealth.

3. Working Capital Management Decision: The treasurer focuses on the current assets, liabilities, and the working capital cycle to manage the cash-flow forecasts, refinancing and repayment requirements, and funding.

4. Liquidity Management: This is the fundamental role of the treasurer. He must decide the amount of cash to be retained in the business, the amount to be re-invested (from cash surplus balance), and physical diurnal management of cash.

5. Relationship Management: The treasurer is the key managerial personnel who interacts with banks, credit rating agencies and clients in order to create the most mutually beneficial contracts.