Problem Set on Week 1
BFF3651: Treasury Management
Instructions:
This problem set focuses on Week 1 learning materials and will be discussed in your
first tutorial.
We encourage you to read the lecture note of week 1, listen to the recorded lecture, and
attempt the problem set before your tutorial. This framework will allow us to ensure
student-centered activities requiring intentional engagement. We encourage you to
participate actively in the tutorials, ask questions, and debate critically on the problem
sets' solutions. Your active participation is essential to ensure a deep, long-lasting, and
enjoyable learning experience.
Questions:
1. Explain any two challenges that a treasurer may face in managing the treasury.
2. After introducing a centralized treasury system, Tyco was able to reduce costs of idle
cash holdings without detreating its liquidity-Explain using the years 2005 and 2002.
3. What are the pros and cons of a more extended collection period?
4. Why treasurers should foster a strong relationship with
a. Banks?
b. Credit rating agencies?
5. Ms. Anna started working as treasurer of Tylor company in 2002. Based on the
information given below, evaluate Anna's performance in managing the Tylor company's
treasury (Hints: calculate liquidity and efficiency ratios, compare the years 2002 and
2004, and comment on Anna’s performance).
Cash and Cash Equivalents
Receivables
Inventories
Other Current Assets
Total Current Assets
Total Assets
2002
$4,475.40
$4,831.90
$4,016.40
$1,315.70
$14,639.40
$55,457.50
2004
$1,267.00
$4,060.00
$2,793.00
$1,552.00
$9,672.00
$33,012.00
Accounts Payables
Notes Payables
Accrued Expenses
Debt (Long-term) due in one year
Other current liabilities
Total current labilities
$2,173.80
$100.00
$1,219.10
$5,719.00
$5,578.60
$14,790.50
$1,526.00
$0.00
$643.00
$700.00
$3,615.00
$6,484.00
Sales
Cost of goods sold
$25,589.80
$10,965.80
$30,938.00
$15,864.00