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This paper generalizes the Sethi–Thompson model of cash balance dynamics to the case of multiple current and investment accounts, with the cash flows or demands incident on the current accounts. Cash transfers can occur between any pair of current–current or current–investment accounts, with transaction costs proportional to the amount transferred, always deducted from current accounts. Performance indices are defined and maximization of an index for the next instant (day), by suitable choice of cash transfers that satisfy desired constraints on account balances, defines the basic optimal control problem referred to as one step ahead optimal control. It is shown that this one step ahead optimal control can be written as a mixed integer linear program of small size, leading to an implementable real time strategy for the generalized cash balance problem. In addition, for the simple case of a single cash and investment account, the proposed strategy is derived analytically and compared with a strategy of Miller–Orr type, called a three‐level strategy. Omniscient optimal control over a horizon is defined as the globally optimal control strategy, assuming the demands over the entire horizon to be known: although computable a posteriori, it is not implementable a priori, and only serves as a benchmark for comparison. The proposed one step ahead optimal or myopic approach makes no assumptions about the distribution of cash demands, and examples show that it attains performance indices which are superior to those attained by three‐level control strategies, and compare favorably with the omniscient benchmark performance indices. [ABSTRACT FROM AUTHOR]

In the context of pension plans, the employer and the worker have distinct interests and face different risks. The worker seeks higher retirement benefits, while the employer aims to minimize the cost of fulfilling his obligations. To address these diverse needs, the defined contribution plan managed with participating life insurance (DC-PL) and the cash balance plan managed with unit-linked insurance (CB-UL) serve as suitable choices. The multi-criteria analysis is conducted using the cumulative prospect theory model to measure the utility of the parties involved toward a mixed product combining these two pension plans. By assigning weights to risk measures and maximizing utilities, the paper employs both additive utility and Nash equilibrium approaches. The results reveal that the CB-UL plan aligns with employers' interests, offering potential financial gains, while the DC-PL plan attracts workers due to its profit-sharing aspect. Significantly, when equal importance is given to both parties, the CB-UL plan emerges as the prevailing choice. This study contributes to the understanding of pension plan design and decision-making dynamics between employers and workers, providing valuable insights for achieving a balance between retirement benefits and cost management. [ABSTRACT FROM AUTHOR]

In the conceptual framework of financial accounting, which serves the purposes of financial reporting, special attention has been paid to cash flow. The purpose of this study is a new understanding of cash flow behavior and the creation of a new experimental model. This research is applied in terms of purpose and quantitative in terms of implementation. The statistical population of the present study is the annual cash balance of 48 specific bank branches (due to the confidentiality of information, it is not mentioned). Two hypotheses have been considered in this research: 1) Cash balances has a Stochastic property; 2) The Geometric Brownie model is better than the Arithmetic Brownie, Vasicek, and Modified Square Root models. The results of the test have been confirmed to be random. Also, by comparing the four models using MSE, RMSE and MAE tests, the best estimation model has been selected and the comparison results of the models have confirmed the Geometric Brownie inclination model as a more efficient model.

In the context of pension plans, the employer and the worker have distinct interests and face different risks. The worker seeks higher retirement benefits, while the employer aims to minimize the cost of fulfilling his obligations. To address these diverse needs, the defined contribution plan managed with participating life insurance (DC-PL) and the cash balance plan managed with unit-linked insurance (CB-UL) serve as suitable choices. The multi-criteria analysis is conducted using the cumulative prospect theory model to measure the utility of the parties involved toward a mixed product combining these two pension plans. By assigning weights to risk measures and maximizing utilities, the paper employs both additive utility and Nash equilibrium approaches. The results reveal that the CB-UL plan aligns with employers’ interests, offering potential financial gains, while the DC-PL plan attracts workers due to its profit-sharing aspect. Significantly, when equal importance is given to both parties, the CB-UL plan emerges as the prevailing choice. This study contributes to the understanding of pension plan design and decision-making dynamics between employers and workers, providing valuable insights for achieving a balance between retirement benefits and cost management.

Background: Some firms with good growth opportunities and additional funds could have difficulties accessing external finance. One possible way to enhance their financial inclusion could be an exciting approach to planning the money reserve collected on a firm’s account. Methods: This article aims to disclose the introduction of financial logistics as the new theoretical field of management science. The authors present, in this paper, the key findings on the development of logistical models of an optimum money reserve calculation taking into account digital transformation and industry 4.0 technologies and optimization methods. Results: The monetary reserve models are analogies of models of storekeeping in supply chains. The specific area of the theoretical research of logistics is shown in this paper, which could be disclosed as the subject of financial logistics as a science. The authors consider the term “Financial Logistics” based on logistics theory and money demand. Conclusions: Authors suggest the methodology of studying the nature of both financial and material flows of resources by comparing the relevant formulas. From the researchers’ points of view, financial logistics could be defined as the theory of managing the cash flows based on the logistical models for calculating a corporation’s cash reserve. The authors find it interesting to expand the conditions for calculating financial flows since the uncertainty of external market conditions always influences actual commercial activity.

This study aims to investigate the effect of business strategy and corporate governance on maintaining cash balance policies in companies listed on the Tehran Stock Exchange. Accordingly, the annual data of 108 listed companies on the Tehran Stock Exchange during 2011 to 2019, unit root panel tests of Im, Pesaran, and Shim and Levin–Lin–the Chu was used. In addition, the f test was used to select one of the panel data and pooled data methods, and the Hausman test was used to select one of the fixed effects and random-effects models. This study showed that the company's strategy had a negative and significant effect on the cash balance of listed companies on the Tehran Stock Exchange. Thus, it can be stated that with increasing the company's prospector business strategies, the need for investment and innovation in the company will increase. Accordingly, companies' cash balance will decrease. Also, with an increase in the proportion of non-executive members on the board, the cash balance of companies decreased due to the lack of attention to voluntary opportunities, so the cash balance decreased significantly.

Background: Some firms with good growth opportunities and additional funds could have difficulties accessing external finance. One possible way to enhance their financial inclusion could be an exciting approach to planning the money reserve collected on a firm’s account. Methods: This article aims to disclose the introduction of financial logistics as the new theoretical field of management science. The authors present, in this paper, the key findings on the development of logistical models of an optimum money reserve calculation taking into account digital transformation and industry 4.0 technologies and optimization methods. Results: The monetary reserve models are analogies of models of storekeeping in supply chains. The specific area of the theoretical research of logistics is shown in this paper, which could be disclosed as the subject of financial logistics as a science. The authors consider the term “Financial Logistics” based on logistics theory and money demand. Conclusions: Authors suggest the methodology of studying the nature of both financial and material flows of resources by comparing the relevant formulas. From the researchers’ points of view, financial logistics could be defined as the theory of managing the cash flows based on the logistical models for calculating a corporation’s cash reserve. The authors find it interesting to expand the conditions for calculating financial flows since the uncertainty of external market conditions always influences actual commercial activity.

Pillar 1B (individual accounts) of the Chinese basic pension fund (BPF) have suffered from substantial underfunding due to a series of challenges such as rising longevity, conservative investment policies, and the fragmentation of the pension system. Using an asset–liability model (ALM), we investigate the effects of the pre-2015 and post-2015 limits, as well as no limits, on asset allocations. We also investigate the likely effect on investment performance of transferring the pillar 1B funds to the Council of National Social Security Fund (NSSF) and raising the retirement age to 65. We find that an ALM is superior to an assets-only analysis, and removing the limits on investment in domestic assets (but not foreign assets) would be beneficial, as would transferring the assets to the NSSF and raising the retirement age. Finally, the official notional rate on individual accounts should be set at a realistic level. [ABSTRACT FROM AUTHOR]

Managers and analysts are trained to validate the cash balance in the balance sheet with the cash balance in the bank, and to rely on the cash flow statement rather than the income statement and the balance sheet. The purpose of this case study is to develop a case study to validate a stepped approach to understand the interaction of the various income statement and the balance sheet accounting transactions captured in the cash flow statement. The decomposition of the various components of the cash flow statements not only reveals these interactions but also helps to understand the interplay among these components of the cash flow statement. It should help both the internal and external analysts to develop a modular pathway for each accounting transaction and identify any earning warning signals about a firm's attempts to manipulate the change in the cash account. [ABSTRACT FROM AUTHOR]

We develop a hyperbolic cash management model based on the Pearson Type IV probability density which minimises extreme variations in firm cash balances. Since the moments for the Type IV probability density are in general undefined and maximum likelihood estimation is compromised by the non-algebraic nature of the Type IV normalising constant, parameter estimation is implemented using the minimum method. Empirical analysis shows that the Type IV density is highly compatible with the quarterly cash flow data of a randomly selected sample of 100 large U.S. corporations. In contrast, around 60% of the 100 corporations return Jarque-Bera test statistics which are incompatible with the Gaussian probability density. [ABSTRACT FROM AUTHOR]

In business, enterprises need to maintain stable cash ows to meet the demands for payments in order to reduce the probability of possible bank- ruptcy. In this paper, we propose the optimal cash holding models in terms of continuous time and manager's risk preference in the framework of stochastic control theory in the setting of cash balance accounting with the interval of a safe area for cash holdings. Formulas for the optimal cash holdings are analyt- ically derived with a widely used family of power utility functions. Our models can be seen as an extension of Miller-Orr model to solve the cash holding prob- lem of continuous time from the accounting perspective. Numerical examples are also provided to illustrate the feasibility of the developed optimal cashing holding models of continuous time. [ABSTRACT FROM AUTHOR]