Due to the financial uncertainty around Brexit, firms must look to ways they can protect their cash flows. One way to do so involves investing in foreign short-term securities. These securities may have higher interest rates than domestic rates in certain periods in the future, providing diversification in a firm’s cash flows. Investing in foreign currency through derivative contracts is another method of preserving cash flows which observes a similar process of protection as do the securities. Another way to protect cash flows from uncertainty is to pay suppliers in advance or at the purchase order date, which can prevent a firm from facing insolvency issues due to rising debt. Along with this, firms can focus on engaging with domestic supply chains as domestic suppliers and buyers will face the least disruptions further preventing possible disruptions to cash flows. Along with these methods, there are clerical factors that can protect the company if properly accounted for. Such factors include developing a comprehensive cash flow strategy ensuring optimal efficiency. Storing receipts in an organized fashion and ensuring all transactions are properly documented protects a firm from discovering unknown debt or losing track of assets. The impact of Brexit on small businesses: Keep on top of cash flow. (2019, March 01). Retrieved June 30, 2020, from https://www.xero.com/blog/2019/02/brexit-cash-flow-management-smbs/ About Pascal d’Arc Pascal is a senior director in SAP Ariba’s Centre of Excellence bringing innovative solutions to help customers find new areas of competitive advantage under the vision of #BusinesswithPurpose. (n.d.). Brexit, Cash Flow, And The Supply Chain. Retrieved June 30, 2020, from https://www.digitalistmag.com/digital-supply-networks/2019/04/23/brexit-cash-flow-supply-chain-06198026/ Madura, J. (2021). International financial management (13th ed.). Australia: Cengage. In response to the dramatic fall in the price of Sterling following the Brexit vote, UK firms should take on adequate practices to avoid hitting cash flow crises. In such times of economic uncertainty, good cash flow management practices deem ever-important, especially for smaller businesses. Companies ought to continue to monitor their cash flows closely and review regularly. They should work on improving accountability and visibility in cash management by systematically organizing receipts and ensuring that all financial transactions are properly documented. They might also need to consider sourcing alternative, domestic suppliers if importing was involved. In order to protect their cash flow, UK firms should minimize any potential loss that can occur due to fluctuations in currency exchange rates. The two most common currency risk hedging strategies include forward contracts and currency options. Both contracts allow the business to buy or sell currencies at a predetermined rate on a future date. However, the company is not forced to do so with a currency option. Because it is a right rather than an obligation, companies are further protected from unfavorable currency movements compared to a forward contract. The Brexit vote had a huge impact on the UK economy, largely a result of cash flow reductions and supply chain interruptions. The reason this matters lays in how the overall supply chain works across Europe. The EU states’ free-trade agreement means goods can flow between the UK and the other European member states without customs and excise checks, thus there is an economic flow of commerce with a physical flow of goods and materials. The financial supply chain and the physical supply chain are therefore linked. For example, if you cannot receive delivery of your raw materials, then you cannot fulfill your customer orders. If you cannot fulfill your orders, then you cannot submit your invoice and, most importantly, you cannot get paid. Therefore, any disruption to the physical supply chain will quickly place greater demands on working capital requirements. This will in turn lead to less confidence in investors and less foreign investment into the UK and its currency. In order to protect against these problems, there are a number of things that firms can do. Investing in foreign securities that are more stable, even though you are faced with higher interest rates. They can use derivative contracts (which I will mention in more depth in the following paragraph) as another method of maintaining a cash influx. When it comes to preventing disruptions in the supply chain, paying in advance with more favorable rates is another option. Finally, and perhaps the best method is through hedging. “Four-fifths of Britain’s major companies have hedged against the risk that a vote to leave the European Union would knock more than 10 percent off the value of sterling, a poll of almost 800 of the top 1,000 showed on Wednesday.”Hedging is making investments that offset the risk posed by currency movements which can be through options or other derivatives contracts. According to the Reuters article I have referenced, this has surged after Brexit as companies, asset managers and speculative hedge funds take a view on the vote.
Why Choose Us
Top Writers4me provides the best top-grade academic writing services in compliance with our customers’ instructions. Have your paper written by a certified professional online college homework help writer to produce only high-quality essays with zero plagiarism.
Professional Academic Writers
You can now choose from a pool of online college homework help writers. Choose your writer and have them write the best content for you.Top Writers4me has, over the years, secured a team of the most reliable, experienced, and qualified writers. You can, therefore, trust that your assignment is in good hands.
We know that students have very limited budgets. And for that, we always strive to provide only the best, most affordable online college homework help services to our customers. Our goal is to provide top-quality assignment help services to all customers at the lowest, most affordable prices.
At Topwriters4me.com, we pay strict attention to deadlines. We recommend you to check out clients’ reviews for assurance that we will complete your assignments within the set deadlines. You can, therefore, trust that your paper will be done within and before the set deadline. Until now, we have not missed a single deadline.
Our Topwriters4me.com homework helper experts write only 100% original and plagiarism-free content for all of our clients. We also have a Quality Assurance Department team that goes through all work submitted by our writers multiple times. You can, therefore, rest assured that any signs of plagiarized or unoriginal content will be rejected before it reaches your portal.
Customer Support 24/7
Topwriters4me.com expert writers are always available 24/7 for customers who need assistance with using our website. You don’t have to check your watch the next time you want to have your assignment written. Our customer support is always available round the clock and ready to listen to your queries. Feel free to contact us via the Chat window or support email: email@example.com.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
For years now, Topwriters4me.com has stood as a leader in providing its customers with the best online college homework help service in the industry. And all you have to do is provide us with the details of your order. Leave everything else to us. We’ve always got you covered.
Since we launched, Topwriters4me.com deserved the best online “college homework help status” thanks to our essay ordering, writing, and delivery process. We deliver nothing but excellence in our results. Our essay writing services include impeccable grammar, zero-plagiarism, proper structure, and conformance to guidelines.
Admission and Business Papers
Our top-quality online college homework help services guarantee that you will be accepted into your desired university. You just need to fill out your admission and business papers, and our team of online homework help workers will handle the rest. We will help you achieve and secure the best positions in your admissions forms.
Editing and Proofreading
At Topwriters4me.com, we have a skilled writing and editing team that’s dedicated to creating, editing, and restructuring for all types of papers. Our online college homework help editing and proofreading team will check, paraphrase, and correct any grammar mistakes on your paper before submitting the final document to you.
At Topwriters4me.com, we pride ourselves in having writers in almost all fields, even the most technical ones. You never have to worry about your paper being too technical for our certified online college homework help writers to handle. Mycoursewriter's team of writers can handle even the most complex writers. We will match your paper to the most competent writer that we believe will handle your paper the best way possible.