For us to offer the best financial borrowing and investment advice possible, we believe that an assessment of our clients’ financial plans is an essential starting point for our service. A review of the balance sheet is therefore our starting point for understanding the client’s financial position and is a key element in determining a Treasury Management Strategy.
We then engage in a detailed dialogue with the client to project key balance sheet metrics and cash flows for the long-term future – this shows how the underlying need to borrow may change and therefore guides our advice on the prudent levels of debt and investments to be held. Then, by incorporating the interest rates on current loans and rate forecasts, we project future interest costs. Finally, we build in the volatility of interest rates and the uncertainty of the client’s cash flow forecasts to show the variability in projected interest costs – together with an understanding of the client’s risk appetite, this informs our advice on the appropriate mix of fixed and variable rate debt.
Although balance sheets and Treasury Management Strategies are typically produced only once a year, cash flow and interest rate forecasts change regularly. The balance sheet review is therefore constantly updated to ensure our strategic advice is always based on the most up-to-date information available.
Just a short email to say that I found today’s seminar most informative and extremely well presented. I feel a lot more confident about our Treasury Management arrangements for the Police Authority having listened to what Arlingclose had to say, especially about other clients who had got into difficulties.
Judy Venables (Independent Member), Hampshire Police Authority