Linda is the chief financial officer with ACME Manufacturing. ACME has several d
ID: 2796554 • Letter: L
Question
Linda is the chief financial officer with ACME Manufacturing. ACME has several deposit accounts and a term loan with your bank. Linda is not satisfied with her company's current cash management system and is interested in what your bank might offer. What products would you recommend? Explain your choices.
Read each customer situation and identify products and services to meet the customer's financial needs. Hint: Look beyond just the customer's stated need to identify cross-sell opportunities. Explain your choices.
Linda is the chief financial officer with ACME Manufacturing. ACME has several deposit accounts and a term loan with your bank. Linda is not satisfied with her company's current cash management system and is interested in what your bank might offer. What products would you recommend? Explain your choices.
Read each customer situation and identify products and services to meet the customer's financial needs. Hint: Look beyond just the customer's stated need to identify cross-sell opportunities. Explain your choices.
Explanation / Answer
Answer:
Cash managment is one of the important & essential finance function of a company. Bank plays a major role for financing the working capital and capital expenditure.
For better cash managment i will suggest some of the option:
1. LC/ Bills Discounting- To get money at zero days the company should prefer to go for bills discounting option against the debtors. and at the same time the company can prefer to go for discounting the LCs opened as against the debtors. both schmes are in the same line only thing the procedures are different.
2. Packing credit in Foreign Currency (PCFC) -This option is one of the best option where export realisation will be credited at Zero days and the same can be paid to bank as and when the money received from the customer. in this scheme we can go for hedging strategy to cover the foreign currency risk.
3. Term Deposit scheme- This option is also one of the attractive option where the money will be parked to a deposit account for a specific period at a specific interest rate. so that guaranteed return is protected.
As a CFO financial planning is must and essential for the company operation and growth. Hence Ms Linda should venture out all the 3 options suggested by the banker to have a good cash managment system
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