Name company Business sector 1.

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APPENDICES

Appendix A

Name company

Business sector

1. Industrial 2. Insurance 3. Real estate 4. Industrial 5. Real estate 6. Banking 7. Industrial 8. Industrial 9. Banking 10. Housing 11. Real estate 12. Financing 13. Industrial 14. Housing 15. Housing 16. Banking 17. Financing 18. Industrial 19. Insurance 20. Banking 21. Financing 22. Industrial 23. Industrial 24. Banking 25. Industrial 26. Industrial 27. Industrial 28. Financing 29. Financing

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Appendix B

Forecasting, cash surplus investment & control.

This research will focus on the cash flow forecasting-, investment-, and cash

management- and compliance processes in your company. It will take about ten minutes to complete.

The questionnaire is organized as follows.

Question 1 - 5: concerning the cash flow forecasting process.

Question 6 - 15: concerning the investment decisions within your company. Question 16 – 18: concerning market knowledge.

Question 19 & 20: concerning compliance with applicable laws and regulations. Question 21: one question on the overall process of excess cash identification and investment.

Question 22: Is one open question. This question is not obligatory but it would be of great value if you would take a little bit more time to answer these questions too.

The questions are short and straight forward. The questionnaire contains 21 multiple choice questions and 1 not obligatory open question.

With your answer on question number 23 you can indicate whether you would like us to keep the information confidential.

Good luck with the questionnaire! Thanking you again!

1. The company experiences discrepancies between forecasted cash flows and actual results.

always often sometimes never

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Factors influencing treasurer’s choices

2

3. Forecasting is seen as a strategic task. totally disagree disagree indifferent agree totally agree I don't know

4. The prediction of investable cash is highly trustworthy. totally disagree disagree indifferent agree totally agree I don't know

5. Which of the problems is present in your company concerning the forecasting process?

always often sometimesnever lack of system integration (appropriate processes to facilitate the sharing

and protection of accurate and reliable data). overuse of spreadsheets

lack of support (lack of motivation for cooperation from across the company)

isolated treasury department (lack of operational information in forecasting process)

too many tasks for the treasury department technology issues

other

6. Within the investment policy, a policy has been established to guide investments of excess cash funds.

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7. Restrictions concerning risk requirements filter acceptable investment instruments from the pool of investment options.

totally disagree disagree indifferent agree totally agree I don't know

8. How regularly is the investment policy updated? daily weekly monthly 3 monthly 6 monthly 9 monthly yearly

9. How does your company use "inhouse" investment management (for liquid assets)?

in-house

partially in-house and outsourced outsourced

10. What percentage of forecasted surplus cash is used for investments? 0% - 20%

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4

11. What is the annual % return your investment portfolio is generating nowadays? 0% - 20% 21% - 40% 41% - 60% 61% - 80% 81% - 100% more than 100%

12. What is the level of liquidity?

I.e. how fast can funds be transferred into cash? (in days) within less than 1 day

within 1 and 7 days (1 week) within 7 and 30 days (1 month) within 30 and 90 days (3 months)

within more than 90 days (more than 3 months)

13. When evaluating investment decisions, how does your company prioritize the following:

Fill in for each of the factors in what way this is prioritized by the company. With high / moderate / little / no priority.

High

priority Moderate priorityLittle priority No priority Liquidity.

Yield. Risk. Tax Factors.

Ability to hold investments and withstand financial losses. Effort in managing each investment.

The extent of credit risk.

The extent of diversification (concentration limits). Credit ratings.

Maturity structures.

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14. What does the (daily- to longer- term) investment portfolio mix look like in percentages? Between:

The complete matrix (the answers to the 9 rows) must sum up to 100%. You do have to fill in every row. Therefore, when the investment instrument is not in your portfolio, please answer with zero. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % money market funds % money market instruments % bank deposits % enhanced liquidity funds % repos/reverse repos % stock % bonds % certificates % other

15. What does the (daily- to longer- term) investment portfolio mix of maturities look like in percentages? Between:

The complete matrix (the answers to the 6 rows) must sum up to 100%. You do have to fill in every row. Therefore, when the investment instrument is not in your portfolio, please answer with zero. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % until up to 1 day / overnight % until up to 1 week % until up to 1 month % until up to 3 months % until up to 6 months % until up to 1 year

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6

17. Are new forms of investment instruments taken into consideration? Always

Often Sometimes Never

18. The company uses benchmark techniques to benchmark other companies in and outside their industry.

19. Management and board approval are required for all investment transactions, exceeding a certain risk level.

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21. Concerning the whole process of identification and investment of surplus cash, the most implications exist within:

Choose the problem which is most obviously present within your company.

The forecasting process

The investment policy (status and diversification)

Market knowledge (instruments & benchmarks other companies) Compliance with management policies, laws and regulations.

22. What is within your company the most obvious implication/problem within the entire process; of cash surplus identification until the investment of cash surplus? If any, could you than give an explanation of it?

(Not obligatory)

23. Would you like us to keep the answers on this questionnaire confidential? Yes

No

End of survey: Cash Management: Forecasting, cash surplus investment & control.

Thank you very much for your valuable contribution to our research.

Once the research is complete we will be happy to send you a copy of the resulting report. We are confident that the benchmarks and insight will be valuable for you in identifying where processes could be improved.

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Appendix C

Process Implications Opportunities Boundary factor Boundaries

Forecasting Process

Inaccurate forecasts:

• Inability to predict cash balances. • Increase of opportunity costs. • Missed revenue opportunities.

• Increased costs associated with overdraft fees, credit, or liquidation penalties. Not a Strategic view:

• Less efficiency.

Accurate forecasts:

• Ability to make profitable management decisions

• Prediction of availability of investable cash.

• Increase yield through maturity extension. Strategic view:

• Enhanced efficiency.

• The forecasting process, in other words, the trust in the adequateness of the cash flow forecasts.

• The strategic view on the forecasting process.

Extending:

Cash flow forecasting will support the treasurer with making decisions about how to allocate cash surpluses across the spectrum of available investment instruments. When using the cash flow forecasting process strategically the entire cash surplus management process will enhance efficiency.

Narrowing:

The accuracy will stipulate whether the forecast can or cannot be used in order to make decisions concerning investments. Hence, inaccurate forecast can result in opportunity costs and therefore missed revenues.

Investment Policy

Outdated investment policy:

• Inadequate investment performance. • Overly risky investments

• Underperforming investment decisions. No presence of guidance of cash surpluses. • Not a structured procedure.

Late identification of cash surpluses. • Shorter maturities.

Updated investment policy: • Highest possible return.

• Determines the risk and return profile. • Filters unacceptable investment

instruments.

• Enables the utilization of investment resources necessary to achieve an appropriate level of return given current market conditions.

Presence of guidance of cash surpluses: • Higher attention and therefore more

action with cash surpluses.

• Up-to-date-ness of the investment policy.

• Risk limitations

• Risk/return requirements. • Required levels of liquidity and

solvency required for the performance measurement of a firm in specific industries.

Extending:

An efficient, documented and updated investment portfolio will reduce overall risk through and increase revenue through enhanced return. Guiding policies in relation with excess cash will enhance return. Additionally, early identification of excess cash will result in longer maturity investments.

Narrowing:

Risk limitations filter possible investment instruments from the pool of investment instrument alternatives. Guiding policies in relation with excess cash will be negatively related with risk requirements concerning investments.

Market knowledge

No search for investment opportunities. • Stay with traditional forms of

investment. • Inefficiencies. • Loss of revenue.

Strict regulations & restrictions:

• This way many investment instruments are filtered out.

• No place for creativity.

• Much chance of legal complications.

Search for new market opportunities.

• Through benchmarking & market analysis: • New knowledge/techniques

• Taking new investment alternatives into consideration.

Soft regulations & restrictions: • A broad spectrum of investment

instruments is available. • Creativity is possible.

• Little chance of legal complications.

• Usage of benchmarking techniques. • Conduction of market analysis. • Consideration of new investment

instruments.

• Management & board approval.

Extending:

Investigation of the market through benchmark techniques and market analyses broadens the scope of opportunities.

Narrowing:

By maintaining traditional ways for investment, fruitful investment opportunities are missed. Many restrictions lead to a smaller scope of investment opportunities. A high necessity of management and board approval can delay investment decisions, and therefore will results in investments with shorter maturities.

The overall cash surplus management process.

Inadequate:

• Inability to determine balance. • Failure to forecast the cash position. • Inability to capitalize on maturity

extension.

• Opportunity costs.

Adequate: • High returns. • Risk reduction.

• More possibilities for maturity extension. • Efficiency.

• Bottlenecks within the process. • Implication areas within the

processes; e.g. technology issues; lack of integration; isolated treasury.

Extending:

When all the different processes are working more integrated together, the

smoother the whole process of identification until investment will be. The process with the most implications should be improved in order to enhance efficiency. Narrowing:

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Summarized explanation of the usage of the Correlation analysis.

In this research the analysis consists of a correlation analysis, to discover a relationship between two variables. A correlation analysis is exercised in order to explain the strength and direction of the linear relationship between two variables. Pearson product-moment

coefficient is intended for interval level (continuous) variables. Additionally, it can be utilized for one continuous variable and one dichotomous variable. Pearson correlation coefficients can merely obtain on values from -1 to +1. The minus sign (or missing minus sign) specifies whether the relationship is a positive correlation or a negative correlation. With a positive relationship this means that as one variable increases, the other also will increase. Hence in contrarily, with a negative relationship; as one variable increased, the other decreases. The size of the absolute (r) value (ignoring the sign) gives an indication of the strength of the relationship between the two variables. A perfect correlation of 1 or -1 points out that the value on one variable can be decided upon exactly by recognizing the value of the other variable. A scatterplot of a perfect relationship would demonstrate a straight line. Conversely, a correlation of 0, points to no relationship between the two variables. Here, recognizing the value on one of the variables does not give help in forecasting the value on the second variable. A scatterplot would show a circle of points, with no plain pattern (Pallant, 2003).

Correlation provides a table giving Pearson r correlation coefficients between each pair of variables listed. This can be quite large if more than a few variables are selected. Hence, since in this research only relationships between two variables were analyzed, all of the correlation

Correlations 1 ,103 , ,608 29 27 ,103 1 ,608 , 27 27 Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N V3 V11 V3 V11

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1 r = .10 to .29 or r = -.10 to -.29 small

r = .30 to .49 or r = -.30 to -.49 medium r = .50 to 1.0 or r = -.50 to -.1.0 large

Figure 39. Interpretation values (Pallant J., 2003)

number of cases are given. There are a number of different aspects of the output that should be considered (Pallant, 2003).

First, the correctness of the N (number of cases) should be checked upon. When there is a lot of missing data, the reason why this occurs needs to be identified. In the above figure 27 cases had scores on both the scales used in the analysis. If a case would have been missing on either of the variables it would have been excluded. Secondly, the direction of the relationship should be considered. If there is a negative relationship, the minus sign appears which means that the variables occur in a contrasting manner; that is, high scores on one are associated with low scores on the other. The interpretation of this depends on the way the variables are

scored. In the table above, the correlation coefficient is positive (,608), indicating a positive correlation between perceiving the forecasting process as strategic (question 3) and the results on annual return (question 11). Hence, this relationship is not significant. Thirdly, the size of the value of Pearson correlation (r) should be considered. This can range from -1.00 to 1.00. This value indicates the strength of the relationship between the two variables. A correlation of 0 indicates no relationship at all, a correlation of 1.0 indicates a perfect positive indication, and a value of -1.0 indicates a perfect negative correlation. In order to interpreted values between 0 and 1 many authors have different opinion. In this research the suggestions of Cohen are used as guidelines.

Hence, it should be remembered that the minus sign only refers to the direction of the relationship, not the strength. The strength of r=,608 and r=-,608 is the same. Fourthly, the coefficient of determination can be calculated in order to get an idea of how much variance the variables share. Therefore, the r value needs to be square (multiplied by itself) to

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3 Appendix E

Power Distance Individualism Masculinity

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Venezuela 81 12 73 76 Yugoslavia 76 27 21 88

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Factors influencing treasurer’s choices 5 Appendix F Correlations 1 -,049 ,347 , ,799 ,065 29 29 29 -,049 1 ,401* ,799 , ,031 29 29 29 ,347 ,401* 1 ,065 ,031 , 29 29 29 Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N V1 V10 V4 V1 V10 V4

Correlation is significant at the 0.05 level (2-tailed). *.

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1 Cont. DATASET SPSS

Q13B Q13C Q13D Q13E Q13F Q13G Q13H Q13I Q13J Q13K Q14 Q15 15a Q16 Q17 Q18 Q19 Q20 Q21

1 1 2 1 3 2 3 3 2 2 3 0 0 -9 3 3 4 5 5 1 2 2 4 2 2 1 3 1 2 2 4 3 4 5 5 3 1 1 4 1 3 1 3 4 4 1 1 1 4 1 4 2 2 1 3 3 3 5 4 1 4 1 1 2 1 1 1 1 1 1 1 2 2 6 4 2 4 5 5 2 5 1 4 4 4 1 1 1 1 4 4 3 2 1 6 3 6 1 6 1 6 2 4 4 4 2 2 2 2 3 4 4 3 2 4 3 1 5 5 3 7 1 4 1 1 1 1 1 1 3 3 1 1 1 3 3 2 1 5 3 8 1 3 2 2 1 2 2 2 1 3 3 2 1 5 2 5 5 5 1 9 1 4 2 1 1 1 1 2 4 4 2 X -9 1 3 3 3 5 1 10 1 2 3 1 1 3 1 2 2 3 4 2 1 4 3 2 5 5 2 11 1 4 4 4 1 1 1 1 2 3 1 1 1 1 4 1 5 4 2 12 1 4 2 2 1 2 1 2 2 3 1 2 1 2 3 2 4 4 1 13 1 3 1 1 1 1 1 1 1 4 2 4 4 1 3 1 5 4 1 14 1 3 2 2 1 2 1 2 2 3 4 4 4 5 3 4 4 5 2 15 1 4 4 4 1 4 4 1 1 4 2 4 1 1 4 1 5 3 1 16 1 3 1 1 1 2 1 2 2 3 3 5 2 5 2 4 5 5 4 17 1 3 1 2 1 2 1 1 2 4 2 3 4 4 3 3 5 5 2 18 1 3 2 2 2 2 2 2 2 2 1 1 1 4 3 4 5 4 1 19 1 3 1 3 1 2 2 2 4 4 1 2 1 1 4 3 4 5 4 20 1 1 2 2 2 1 3 2 1 1 X X -9 5 3 3 5 5 2 21 1 4 2 3 2 2 1 2 3 4 3 2 1 4 3 1 4 4 3 22 2 2 2 2 2 2 2 2 2 2 2 5 2 4 3 4 4 4 1 23 2 3 2 3 1 3 2 2 2 4 3 X -9 5 3 3 4 4 1 24 2 1 2 2 2 2 3 3 3 3 1 1 1 1 4 4 4 2 4 25 X X X X X X X X X X X X -9 X 6 X X 5 X 26 1 4 2 3 1 1 1 2 2 3 X 5 3 5 3 4 5 4 1 27 1 4 1 1 1 1 1 1 1 3 3 2 5 4 3 4 4 5 X 28 1 2 1 2 2 3 2 2 2 2 4 6 2 4 3 6 5 4 4