Manage Financial Resources

Running head: MANAGE FINANCIAL RESOURCES
Manage financial resources
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1MANAGE FINANCIAL RESOURCES
Table of Contents
Part A...............................................................................................................................................2
Part B...............................................................................................................................................4
Part C...............................................................................................................................................6
Part A...............................................................................................................................................7
Part B...............................................................................................................................................7
Part C...............................................................................................................................................8
Part D...............................................................................................................................................9
Reference and bibliography...........................................................................................................11

2MANAGE FINANCIAL RESOURCES
Part A
Introduction
BHP Ltd that is registered under Australian Stock Exchange is planning to centralize
most of group operation for treasury management to improve the latent capacity, for cost
efficiency and for exploring new application along with reducing the risk. Main objective of the
report is to focus on the benefits of treasury centralization and how to minimize the issues
associated with treasury centralization.
Discussion
With the growth of multinational organizations and expansion of global footprints the
responsibility of treasurer increases and ability of managing the responsibilities become more
difficult. Various benefits of treasury centralization are as follows –
 Economic – it improves the management of working capital through increasing the access
to the cash that results into increased return on the investment for excess cash and
reduction of debt.
 Control – it helps in standardized cash management for all the legal entities and enable in
global compliance with the treasury procedures and policies of headquarter.
 Risk management – it helps is effective management of the FX exposure as well as
managing the interest rate risks through the global oversight (Šarkanová and Krištofík
2018).
Potential issues for subsidiaries that may arise due to treasury centralization are as follows –

3MANAGE FINANCIAL RESOURCES
 Identification of risks and cash – it may take long time in constructing global cash or the
risk position while combining the information from different sources. Hence, strategic
decisions shall be made for accessing accurate and timely information before
centralization.
 Access to liquidity and financing – once the global information is generated regarding the
entity’s position the treasury can act on optimizing the liquidity for across the group.
Through establishing the in-house bank for supporting requirements the company can
have access to the liquidity as well as financing.
 Control and operational efficiency – operational efficiency as well as control across all
the subsidiaries shall be scrutinized before implementation of treasury centralization as
until there is proper control on the operational efficiency (Choudhury 2015)
Conclusion
It is hereby concluded that treasury centralization have various benefits like maintaining
visibility of debt, investments, cash and the overall liquidity, managing and monitoring the risk
and executing he business transactions under the financial markets. However, there may involve
some issues while implementing the same those can be taken care of through controlling the
operational efficiency, analyzing the financing and liquidity and identifying the cash and
associated risks.