rofile shown in the appendix at the end of this paper gives a bird’s eye-view of the company’s treasury management framework and is considered the best suited to the present day environment the company is operating under. The major five functions reviewed in the main text shows that the company is managed conservatively and that it is not engaged in speculative activities.
Treasury function in an organisation is essential in order to maintain liquidity in funds flow. Liquidity will be affected due to various risks involved. The management must foresee unavoidable risks involved and provide for such risks by structuring the fixed capital and working capital suitably. (ACT)
Company Glaxo Smith Kline PLC, UK‘s case is taken up for study of its treasury management. A brief outline of the company’s treasury profile is furnished in appendix at the end of this paper. Aim and objective of this study therefore is to ascertain the risks faced by this company and how it has designed its capital structure to manage its treasury functions in order maintain its liquidity and whether the current practice of treasury management is adequate or not.
Treasury functions encompass capital markets and funding, cash and liquidity management, corporate financial management, Risk management and treasury operations and control. (ACT) The role of the treasury department is to maintain company’s liquidity. The treasurer has to monitor current and projected cash flows and make use of the information to suitably invest excess funds and also be in readiness for additional borrowings or equity in case of capital shortage that may be encountered any time. It should safeguard the existing assets by prudent investment of funds available and also guard against excessive losses arising out of interest rate and foreign exchange fluctuations. Cash forecasting, working capital management, cash management, investment management, treasury risk management, management advice, credit rating