Finance Project 2

Finance Project 2

Table of Contents
PART A...........................................................................................................................................1
(a) Potential benefits of treasury centralisation ..........................................................................1
(b) How the business proposes to minimise any potential problems for the subsidiaries that
might arise because of treasury centralisation?...........................................................................1
PART B............................................................................................................................................2
Evolute financial state and performance.....................................................................................2
(b) Company consider stick exchange listing.............................................................................4
PART C............................................................................................................................................5
(a) Were actual costs higher than they should have been to procedure and sell 8200 Darcy's?. 5
(b) Was actual revenue satisfactory from the scale of 8200 Darcy's? ........................................5
(c) Reason for the difference in profit between actual profit and budgeted profit?....................5
REFERENCES................................................................................................................................7

PART A
(a) Potential benefits of treasury centralisation
Treasury centralisation is a system of financial management that applied by the most of
the business entities in which financial, cash management, foreign exchange decisions and
controlled by unique team. There are mentioned some benefits of treasury centralisation in
context of BHP that are mentioned below:
1. Holistic cash management: It helps to provide a complete view of bank balances, short
term liquidity requirements and long term cash forecasts. It allows for optimizations of
banking relationships and increase of return on cash by payment factory structure cash
pooling, netting and target balance management.
2. A close eye on payment abuse: Currently, international cybercriminals are increasingly
targeting corporate payment procedure due to cash flows out of business. Through
treasury centralisation aware about cash flow and able to effectively combat fraudsters
and keep close eye on payment abuse. Centralizing outgoing payments factory or an in
house bank and harmonizing all related procedure in order top enhance transparency of
cash flow and take holistic approach for managing the risks.
3. The advantage of centralised treasury system to integrate reporting and accounting area
and achieve all detailed, accurate and up to date information about company cash position
and associate risk. Such elements are helping in preparing strategies to get rid of from
risks and find out various resources of accounts information.
(b) How the business proposes to minimise any potential problems for the subsidiaries that might
arise because of treasury centralisation?
BHP is an Australian registered multinational organisation that conduct their subsidiaries
around 33 nations like Europe, US and may others, These subsidiaries are traditionally allowed a
big amount of autonomy and proposing to centralise of different management operations of
group treasury. As a result it impact on the business in positive and negative manner. There are
arising different problems such as:
Liquidity risk: It is a main risk that faced by the subsidiaries for enough fund and
continue their operational activities by economic cycle and enough funds for strategic
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