What does Treasury do?

1) Short-Term Investments

Treasury maximizes the cash return, while having access to funds.

Treasury teams are responsible for investing excess cash in short-term, low-risk instruments to earn a return while maintaining liquidity.

Examples: money market funds, government bonds, certificates of deposit.

2) Debt Management 🏦

Focus: Capital Efficiency

Treasury teams manage company debt, including issuing new debt, refinancing existing debt, and managing interest payments.

Refinancing company debt minimizes the cost of capital.

3) Risk Management ⚖️

Focus: Mitigate Risk

Treasury teams manage financial risks like currency risk, interest rate risk and credit risk.

They use hedging strategies, derivatives, and other financial instruments to mitigate these risks and the company's financial health against downside (in case of black swan events).

4) Liquidity Management 💸

Focus: Optimizing Working Capital

Treasury manages cash reserves, credit lines, and other sources of liquidity to make sure the company can overcome financial challenges.

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