What are the fundamental principles of treasury management

The fundamental principles of treasury management include liquidity management, risk management, and capital optimization. Liquidity management ensures that a company has enough cash flow to meet its short-term obligations and unexpected needs. This involves managing cash reserves, investments, and funding sources. Risk management in treasury involves identifying, assessing, and mitigating financial risks such as interest rate changes, foreign exchange fluctuations, and credit risks. Lastly, capital optimization focuses on maximizing the company’s value by efficiently managing its financial resources, including capital allocation and financing strategies. These principles help in maintaining financial stability, optimizing cash flow, and achieving a company’s strategic financial goals (source, source). Key Takeaway: Treasury management focuses on liquidity, risk management, and capital optimization for financial stability.