Confirm The Best Cash Balance Of HT Company Basic On Stochastic Model

The cash balance of HT company have changed hugely since September 2014 year. This company will make stronger in the future according to the prosperous industry, it was predicted that the cash flow running faster than before and the outflow would bigger. So the management layer make a decision that we can confirm the best cash holdings, then we can put the idle fund invest in some portfolio,it will raise the effecting rate of capital and enhance the company value as it. So it is necessary to calculate the cash holdings rational.Firstly this paper making literature review in some methodology that confirmed the best holdings, we compared merits and faults of models from using the models prerequisite. Secondly we decide the methodology in confirmed the best cash holdings combine the company’s specific circumstance was Stochastic Model; Thirdly we calculated all kinds of parameters according Stochastic Model, there are minimum cash holdings, the fees of transaction between securities and cash, changes of net cash flow, opportunity cost.But we must to analyst the rational of the estimation of cycle before we calculated the parameters. Finally we can confirm the Best cash holdings of HT company by Excel System.We get the Best cash holdings is 150,455.02 finally according this research and take effective in confirm the best cash holding according compare the past date. We found that the cash balance exceed the cash holdings in 22 weeks via compared the best cash holdings and the cash balance in 22 weeks. According this methodology we can get the idle fund in total was 150,455.02. It can gain the surplus income if we invested in some securities. In other word, we can get the surplus profits under this methodology.This research benefit some company likes HT company from Stochastic Model, it let them knows the conditions of cash management and avoid the risk,even more in investment. In the future this company will become stronger than now, they can easily to confirm the best cash holdings according the methodology. At the same time this method can make some use for reference in some company likes HT company.