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On the formal foundations of cash management systems

Francisco Salas-Molina, Juan A. Rodriguez-Aguilar (), David Pla-Santamaria () and Ana García-Bernabeu ()
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Juan A. Rodriguez-Aguilar: IIIA-CSIC
David Pla-Santamaria: Universitat Politècnica de València (Campus Alcoy)
Ana García-Bernabeu: Universitat Politècnica de València (Campus Alcoy)

Operational Research, 2021, vol. 21, issue 2, No 12, 1095 pages

Abstract: Abstract Cash management aims to find a balance between what is held in cash and what is allocated in other investments in exchange for a given return. Dealing with cash management systems with multiple accounts and different links between them is a complex task. Current cash management models provide analytic solutions without exploring the underlying structure of accounts and its main properties. There is a need for a formal definition of cash management systems. In this work, we introduce a formal approach to manage cash with multiple accounts based on graph theory. Our approach allows a formal reasoning on the relation between accounts in cash management systems. A critical part of this formal reasoning is the characterization of desirable and non-desirable cash management policies. Novel theoretical results guide cash managers in the analysis of complex cash management systems.

Keywords: Finance; Graph theory; Formal reasoning; Multiple accounts; 90B10 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s12351-019-00464-6

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