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June 18, 2015

Cash Flow Forecasting Workshop – Finanzsymposium

Last week in Mannheim at the Finanzsymposium we delivered workshops specifically for companies who operate in a multi location environment and are either starting or running a cash forecasting process.

The workshops were well attended and we had some very interesting feedback and debate among the participants. I hope people left with a sense that cash flow forecasting and liquidity planning need not be the arduous task that it sometimes turns into to.

Thank you to everyone who attended, you made the sessions very enjoyable for us. The Rosengarten is a wonderful venue and we look forward to returning next year.

The presentation includes:

– Building a business case for cash forecasting
– Driving a forecasting success loop
– How technology can help the forecasting process
– Must have reporting for cash forecasting

You can view the slide deck below:

June 04, 2015

Finanz Symposium – Mannheim

CashAnalytics will be exhibiting and conducting workshops at the 27th Finanz Symposium in Mannheim, Germany next week. The Finanz Symposium is one of the largest treasury and finance events in Europe with over 1,700 delegates and 60 exhibitors in attendance. Full details linked below.


We will be exhibiting from stand 50 in the main hall. Please feel free to call by at any stage to find out more about CashAnalytics and the solutions we provide.


On Wednesday afternoon we will be running workshops entitled “Managing Cash Forecasting in a Multi-Location Organisation.” These workshops will be held in the Christian Cannabich demo room on Floor 1 at the times listed below:

Workshop 1: 15.30 – 16:10

Workshop 2: 16.25 – 17.05

Workshop 3: 17.20 – 18.00

During the workshops we will provide a demo of the CashAnalytics cash forecasting functionality and reporting features.

We look forward to seeing you there!


May 06, 2015

ACT Annual Conference – The Age of Treasury

CashAnalytics will be exhibiting at the ACT Annual Conference in Manchester in less than two weeks time.

CashAnalytics will be among over 80 exhibitors and 1,000 finance and treasury professionals attending the ACT Annual Conference in Manchester from the 20th – 22nd May.

Call by stand 40 in the main exhibition hall if you are interested in the areas of liquidity planning, cash flow forecasting and cash visibility. We would be happy to share our experience in the area and give you a look at the CashAnalytics solution.

Find out more about the conference here – http://www.treasurers.org/annualconference

April 22, 2015

How Much Cash Does Shell Have?

The announcement two weeks ago of Shell’s $70bn takeover of BG Group is expected to start a round of consolidation in the Oil and Gas industry that has been by prompted by low oil prices over the last six months. This deal is the 14th largest acquisition of all time but transactions of this size are nothing new in an industry that has been shaped by massive mergers and acquisitions over the years. Low oil prices in the late nineties led to BP’s purchase of Amoco for $50bn and the merger of the two largest majors at the time, Exxon and Mobil, in an $80bn deal. In 2000 Chevron bought Texaco for $35bn. Shell’s offer represented a 50% premium on the BG share at the time of announcement and BG shareholders will receive a combination of Shell stock and cash. BG shareholders will ultimately hold 19% of the newly merged entity. Few companies worldwide have the financial firepower to pull off a transaction of this size. Below we take a glance at Shell’s financial statements to better understand the financial resources it has to hand.

Current Cash Reserves and Net Debt

Graph showing Shell's Treasury Shell reported cash and equivalents of $21.6bn in its 2014 annual statements which was over double the figure recorded in 2013. While debt levels were also slightly higher at $45.5bn the increase in cash balances has caused net debt fall to just below $24bn. The increase in cash levels in 2014 were attributed to a reduction in capital expenditure throughout the year. While these cash and debt figures may appear enormous they need to be put in context of Shell’s overall operations. Shell’s 2014 income statement showed $327bn of raw material “Purchases” which, on the basis of a 250 day year works out at $1.3bn a day. Ignoring other business costs, this means that Shell has around 17 days of cash on hand to cover raw materials purchases. Other Financial Resources Looking solely at cash and debt levels doesn’t tell the full story of the financial resources Shell has at its disposal. The majority of Shell’s long term debt has been issued using its US shelf registration. This shelf registration allows the company to issue debt securities, ordinary shares, preferred shares and warrants using a single prospectus which is updated every three years. No debt was issued under the registration in 2014 versus drawings of $7.75bn in 2013. Shell also has access to a number of other financing facilities. At the end of 2014 it had close to $40bn of undrawn facilities available. Documentation released with the announcement of the BG takeover included a “Bridge Credit Facility” which gives Shell access to a further £3bn if the takeover is approved.  

 2014 ($m)2013 ($m)
Facility NameFacilityUndrawnFacilityUndrawn
Commercial Paper Programmes20,00020,00020,00017,000
European Medium Term Note Programme25,00012,11725,00018,023
Committed Credit Facility7,4807,4807,4807,480
Current Available Facilities


BG Group has a sizeable debt pile with net debt totalling $12bn and gearing of 29%. Relatively speaking it is more indebted than Shell which is 12% geared. The presentation given by Shell executives following the announcement prioritised debt pay downs, asset sales and a share buy-back programme if the deal goes through in early 2016. All of this points to a very busy time ahead for the Shell treasury team.

March 31, 2015

5 Interesting Facts about Google’s Treasury Operations

In the first of a series of articles looking at how business trends impact the treasury operations of large companies we examine Google and highlight 5 interesting facts that have shaped the growth of their corporate treasury function over the last 10 years.

Google marked the 10 year anniversary of its stock market debut in August of last year. Since IPO Google has achieved almost unmatched business and commercial success and it now ranks amongst the largest and most respected companies in the world. Investors in the IPO haven’t fared badly either – one dollar invested then is now worth around 12 dollars. At the time, however, the IPO was considered a failure on a number of fronts as Google sold a lower number of shares than originally expected at a price towards the bottom of its guided range. The Dutch auction mechanism used for allotting shares to investors caused a great deal of confusion and has been rarely used since.

It wasn’t all Google’s fault; market conditions in 2004 weren’t exactly ideal (dot com scar tissue) and Google had an unproven business model. Looking back over the 10 years since August 2004 the IPO could be considered a low point from a financing and treasury perspective in what has since been a spectacular performance. This article looks at Google’s growth and commercial success through a “treasury lens” to better understand some of the key metrics behind what has grown to be one the largest corporate treasury and investment operations in the world.

To put the Google numbers in context we use comparative figures for two other ICT heavyweights, IBM and Microsoft. IBM IPO’d over 100 years ago and Microsoft went public in the mid-eighties.

Fact 1: Google’s Asset Base has grown by 1,200% to $130bn in 10 years


Google’s asset base has grown by close to 1,200% over the last 10 years and by 3,800% since IPO. In contrast IBM’s assets have increased by 11% and Microsoft’s by 140% over the same period. Some assets require more active management than others. For example goodwill and intangibles are passive from a treasury perspective but cash, on the other hand, requires management on a day to day basis.

Fact 2: Google currently has a $60bn Cash Pile



Every organisation manages cash flow and in some cases surplus cash. Few manage a cash mountain. Google’s latest 10-K showed cash plus cash equivalents totalling close to $60bn which has grown by close to 3,000% since IPO. While Microsoft hasn’t experienced the same growth in cash reserves as Google it remains massively cash rich – ranking second only to Apple in the corporate cash reserve league table.


Cash comprises approximately 50% of Google’s asset base. This is roughly equivalent to Microsoft’s cash to assets ratio but about five times larger than that of IBM. While both Google and Microsoft operate in different fields (advertising and business software) the one thing they share in common is their remarkable ability to consistently turn revenue and profits into cash. This has led to a situation in both companies where the underlying business has generated more cash than it can re-invest in business activities.

Fact 3: Google Traded over $100bn of Securities Last Year


We’ve defined trading volumes as the sum of the investment purchases and sales shown on each company’s cash flow statement. While it may not give an entirely true picture of the work involved in managing investments it does give a good sense of the scale of investment activity undertaken by each company. Most large organisations now operate “bank” like structures involving front, middle and back office activities as well as compliance and risk. Google buys and sells almost one hundred billion dollars’ worth of securities on an annual basis – more than their revenue from business activities.

Fact 4: Google Invests Heavily in Property, Plant and Equipment


Google’s spending on Property, Plant and Equipment (PPE) has increased dramatically in recent years with the treasury team directing over ten billion dollars towards such investments in 2014. Google has ramped up investment in data centres and other cloud related fixed assets as it competes aggressively with the likes of Microsoft, Amazon and Salesforce to gain the upper hand in what is still a fledgling market. This trend is set to continue into the future. Google’s Q4 2014 earnings release stated that “we expect to continue to make significant capital expenditures.”

Fact 5: Despite being Cash Rich Google Still has some Debt


It may seem unusual for a company with such vast cash reserves to have any debt on its balance sheet but the international nature of Google’s business has meant that a large portion of this cash is actually held overseas, out of reach of the head office treasury team due to the tax implications of bringing it home. At the moment, total debt levels are very low at approximately 5% of equity.

This high level glance at Google’s financial statements gives a telling insight into the scale of the company’s treasury operations. It now ranks on a par with mid-scale financial institutions from a treasury activity point of view.  Perhaps the most impressive aspect of the Google treasury story has been the speed of growth since IPO and the positive challenges this has presented. Google is truly a world class organisation, no doubt supported by a world class treasury team.


February 27, 2015

ACT Europe Conference in Dusseldorf

Next week we’ll be exhibiting at the ACT Europe Conference in Dusseldorf.

CashAnalytics will be among 200 finance and treasury professionals at the 2nd annual ACT Europe Conference in Dusseldorf next Thursday. Held in partnership with the Verband Deutscher Treasurer (VDT) and GEFIU the event promises plenty of learning and networking opportunities.

Speakers from companies such as Vodafone, Bayer and Honda will discuss the latest topics impacting the corporate treasury market in Europe and across the globe.

We will be exhibiting at the event so please come and meet us on Thursday 5th March at the Intercontinental Hotel, Dusseldorf.

February 09, 2015

ACT Cash Management Conference

Come meet us this week in London!

CashAnalytics will be exhibiting at Europe’s largest dedicated Corporate Cash Management Conference hosted by the Association of Corporate Treasurers in London this week.

Come and meet us on Wednesday and Thursday in etc. venues St. Paul’s.

November 19, 2014

Definition of a Cash Flow Forecast

A Cash Flow Forecast is a tool that is used by a company to help them understand where their organisations cash balances will be at certain points in the future. A cash flow forecast breaks down the various components involved in deriving what will make up or contribute to a future cash position. Normally within larger companies it would be the responsibility of the finance or treasury team to prepare the cash flow forecast.

Normally a cash flow forecast is prepared in a grid like structure with the cash classifications or cash flows on the y axis and the periods of time being forecasted on the x axis. The image below shows a cross section of a 13 week rolling cash forecast.

Definition of a Cash Flow Forecast

Key Elements of a Cash Flow Forecast

As can be seen in the image above, typically a cash forecast will contain some or all of the following components:

• Opening Balance for the period;
• Receipts – broken down by cash flow item/ classification or by customer;
• Total Receipts;
• Payments – again broken down by cash flow item or by supplier;
• Total Payments;
• Net Movement – either by individual cash flow item or at a minimum total net movement.
• Closing balance for the period.

Time Periods of a Cash Flow Forecast

The time periods for which the forecast projects cash flows for, typically runs across the top of the forecast. For example, the image above shows a 13 week cash forecast. The time periods of a forecast often depend on its purpose and function, whether it is short, medium or long term in focus.

Templates for cash flow forecasts include:

• Daily, often 2-4 weeks in duration a daily cash forecast is very useful to help manage the day to day cash needs of a company;
• Weekly, typically 13 weeks in duration. Weekly cash forecasts are useful from a liquidity planning perspective;
• Monthly forecasts are often the starting point for budgeting processes and tend to have a longer view in terms of their frame of reference;

Cash flow forecasts come in a number of shapes and sizes. The duration and level of detail within a forecast is generally driven by business needs in an organisation. The benefits of each type of forecast need to be weighed up against the dependability of the information over the the time period and the the goals and objectives that the forecast is designed to address.

September 15, 2014

One Month to Go For EuroFinance !

The EuroFinance International Cash and Treasury Management Conference 2014 kicks off in one month from today in Budapest. CashAnalytics is delighted to be exhibiting alongside the world’s leading financial institutions, software vendors and consultancy firms from stand S34 in the main hall.

We look forward to seeing you there.


Eurofinance 2014

August 31, 2014

Cash Forecasting Models

Cash forecasting models are generally organised along short, medium and longer timeframes. In this blog post we take a look at the different types of forecast templates and in what situations they are useful. There are a number of different types of Cash Flow Models that companies use to manage cash flow forecasting processes. In general these are grouped into short, medium and longer term cash flow models. The decision of what model to use is based on the underlying business needs and what view management requires of upcoming cash positions. Outlined below are the main types of cash flow forecasting templates that organisations set up to get a view on future liquidity positions.

Daily Cash Forecasting Model

Daily Cash Forecast Templates are particularly useful for short term liquidity management, where companies require a detailed short term cash position and use a cash forecasting tool to manage the day to day cash requirements of the business. At this level of detail and granularity cash flows are often tracked on a customer or supplier basis rather than broader cash classifications such as trade payments or receipts. As the name suggests, in a daily cash flow template, cash flows are classified on a daily basis. A daily cash forecast would often include a level of automation and take AP/AR feeds from ERP systems or bank accounts. The screenshot below shows an example of a daily cash forecasting template: Daily Cash Forecasting Model

Weekly Cash Forecasting Model

Weekly cash forecasting templates are particularly useful for companies who want to implement a forecasting process that gives them a medium term view of upcoming cash positions. The most regularly used weekly template is a 13 week cash forecasting template. The period of 13 weeks is particularly useful as it gives a quarterly view of upcoming cash flows at all times. The period of 13 weeks is short enough that cash flows can be forecast with a reasonable degree of accuracy and long enough to give visibility on any funding or liquidity requirements. The screenshot below shows an example of a weekly cash forecast template: 12 Month Cash Forecasting Model

Monthly Cash Forecasting Model

Monthly cash forecast templates are ideal for longer term planning purposes, they are a logical extension and follow on from budgeting processes. In terms of the time frames used for monthly cash forecasts, normally they encompass a period of 12 or 18 months. The benefits of monthly cash forecasts is the longer term visibility for planning purposes. However the accuracy and reliability of such long term forecasts need to be considered also. The screenshot below shows an example of a 12 month rolling cash forecast. Weekly Cash Forecasting Model

July 11, 2014

Starting with Why – Driving Cash Forecasting Engagement

Simon Sinek is an author and speaker best known for his perspective on how great leaders inspire others to take action. In his book “Start With Why”, Sinek discusses the marketing principles behind successful businesses and how the leaders stand apart from the pack. He argues when communicating with customers, leading companies start with “Why” a company does what it does rather than just describing “What” it does. The science behind the concept being that starting with why you do something and why it is important is a more powerful way to communicate. Understanding why something is important helps us engage with it, or as Sinek puts it, people are not interested in what you do, they are interested in why you do it.

Driving engagement and the logic of communicating “why over what” is very relevant to cash forecasting in large companies. Cash forecasting is often classified as a “people problem” – the assumption being that it is the individuals job to buy into the forecasting process and that they should just do it. However starting with this viewpoint pushes the responsibility on to the “people” in the entities. If you were to ask someone involved in a forecasting process what they have to do and why they do it you might get some interesting answers. The “what” will probably be clearly articulated as the job of inputting, uploading, reviewing and submitting forecast data, i.e. focused on process work that has to be done. The “why”, although very important to head office treasury, is typically less clear to to the people in the business units.

So how can treasury teams change the dynamic and drive more effective engagement? The starting point needs to be the building of a very clear picture of why forecasting is important and what value is derived from it. This can then form the basis of communicating that value to both senior stakeholders and business units. There are a number of reasons why cash forecasting may be important for an individual company, however it can often be distilled down to two broad activities. – Avoidance of liquidity issues by gaining greater visibility over future cash flows and positions. – Reduction of interest costs and debt levels through more efficient cash management. Every business is different and therefore every forecasting process is different, but at a macro level these are often the prevailing forces as to why forecasting is important for head office treasury teams. Approaching forecasting from the perspective of a CFO in a business unit, important aspects may include: – Risk reduction through visibility and control over their own cash management processes. – Cost reduction for their own business. – Working capital control and management. In other words within an individual entity or business unit people want the the same things on a smaller scale that the treasury team want for the business as a whole. Plus of course they want to get on with running their business and know what they contribute matters. When building a business case for cash forecasting it is critical to take their perspective into account. For a robust cash forecasting process, the most important ingredient in determining success is the engagement of the people involved. Without their buy-in the data they provide could at best be meaningless and at worse be dangerous. Obtaining data that is as accurate as possible into the process requires brain power and that is why engagement matters.

June 04, 2014

Rolling Cash Flow Forecast

Albert Einstein was once credited with saying that compound interest is “man’s greatest invention” and that “whoever understands it, earns it…he who doesn’t, pays it.” While there are questions as to whether Einstein actually coined these phrases or whether instead a crafty banker high-jacked his good name in order to encourage savers, the validity of the claims have never been in doubt. The phenomenon of compound interest has benefited investors for centuries by allowing them to earn income on already earned income.

Another phenomenon that magnifies value by ‘building’ on closely related past events is the concept of rolling forecasts which drive improvements in forecasting accuracy and efficiency on an ongoing basis. A recent trend has seen rolling forecasting and budgeting processes replacing traditional fixed term processes as companies seek to better understand their own future financial performance. Much like their financial planning and analysis colleagues, treasurers can also benefit from this by applying rolling techniques to cash forecasting.

Focus on What Matters
Before delving into the benefits of rolling cash forecasts let’s recap on what matters from a cash forecasting point of view. Cash matters when it is available or “cleared” in a bank account. The goal of cash forecasting is to gain visibility over future available cash and which facilitates effective cash management. Most organisations use a cash forecasting process or model to gain visibility over upcoming cash movements and plan their liquidity requirements. The majority will also admit that whatever tool or process they use it never produces results that are 100% accurate – even 90% accuracy will be out of the question in most cases

Commit to Continuous Marginal Improvement
The good news is that cash forecasting does not need to deliver absolute accuracy to provide significant value. However, to derive maximum value from their forecasting process an organisation needs to commit to a policy of continuous marginal improvements in accuracy rather than attempt to generate results that are expected to be 100% correct, all of the time. Rolling cash forecasts facilitate the shift to a policy of continuous marginal improvement. Unlike traditional fixed term forecasting where it is easy to get disheartened when projections seem wildly off the mark, rolling cash forecasts changes the mind-set to one focused on learning and not dwelling on the past

Measure, Understand and Move-on
To achieve continuous marginal improvement using a rolling cash forecast consider following the MUM (Measure, Understand and Move-on) principle:

1) Measure – “If it can’t be measured it can’t be fixed.” Ensure that a process shows how accurate forecasts are on a business unit and line item basis. This helps focus attention on problem areas.

2) Understand – Accurate measurement allows interrogation of the component parts of a forecast and through direct dialogue with business units, an understanding of where and why forecasting inaccuracies occur can be developed and the tweaks considerations necessary to drive improved forecasting accuracy can be made.

3) Move-on – This is the critical step missing from most forecasting processes. Treasurers may be able to measure where things are going wrong and understand why but without a process for implementing these learnings, they will never be of any use. Rolling forecasting, by its very nature, encourages planners to ‘move-on’ and benefit from lessons learned next time around.

Explore a New Approach
The story goes that had Christopher Columbus invested one penny at 6% compounding annually when he first stumbled across the Americas in 1492 it would have been worth a staggering seventy billion dollars at the turn of this century. While even the most patient CFO is unlikely to afford this much time to a treasurer the path to forecasting success is quite similar – rolling forecasts facilitates continuous marginal improvements which equates to compounding value. A small investment today in a change of process and thinking will yield significant value in the not too distant future.


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