CA Intermediate · Financial Management and Strategic Management · Treasury and Cash Management
Which of the following is the primary objective of treasury management in a company?
The primary objective of treasury management is to ensure funds are available when needed, invest surplus cash at the best safe return, and control financial risks such as interest and currency risk. Audit reporting and product pricing are unrelated functions.
- AMaximising the cost of funds raised from banks
- BEnsuring availability of funds when needed while optimising return on surplus funds and controlling financial riskCorrect
- CPreparing the statutory audit report of the company
- DDetermining the selling price of the company's products
Explanation
Treasury management deals with managing the firm's liquidity, funding, investment of surplus cash and financial risk. Maximising cost of funds is contrary to its aim, and audit reports and pricing are not treasury functions.
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