Working Capital Management: Applications and Cases

James S. Sagner

ISBN: 9788126556151

304 pages

INR 599


Working Capital Management is a comprehensive primer on keeping your business financially competitive in the face of limited access to short-term funds. With detailed insight applicable to each phase in the business cycle, this authoritative guide helps managers revamp current practices for more efficient use of assets and liabilities, including more stringent monitoring and planning of collections, disbursements and balances. Readers will learn how to minimize investments in idle resources and how to maximize the use of forecast data to better identify risk and the optimal use of available funds.





Chapter 1: Concepts in Working Capital Management

  • Working Capital Concepts  
  • Improving Working Capital Management  
  • The Significance of Working Capital  
  • Cost as the Working Capital Issue  
  • Applying These Ideas to a Real Business: Best Buy


Chapter 2: Working Capital Ratios and Other Metrics

  • Ratio Analysis
  • Other Ratios and Their Application
  • Other Metrics
  • Benchmarking
  • General Problems in the Use of Ratios and Metrics


Chapter 3: Cash--Management and Fraud Prevention

  • Forms of Cash
  • Paper Transactions: Lock boxing
  • Paper Transactions: Depository Accounts
  • Paper Transactions: Controlled Disbursement
  • Electronic Transactions
  • Float and Cost Issues


Chapter 4: Cash--Credit and Short? Term Financial Instruments

  • Developing a Short-Term Forecast
  • Cash Budgeting
  • Credit Financing
  • Short-Term Investments


Chapter 5: Managing Bank Relationships

  • The Changing Financial Landscape
  • Bank Relationship Management
  • Cash Mobilization in a Multibank Network
  • General Terms of Credit Facilities
  • Specific Terms in Credit Facilities
  • Ongoing Bank Relationship Concerns


Chapter 6: Accounts Receivable and Working Capital Issues

  • Elements of Receivables Management
  • Float Opportunities in Managing Receivables
  • Receivables Cycle Monitoring: Ratios
  • Receivables Cycle Monitoring: The Aging Schedule
  • Sales Financing
  • Credit Reporting
  • Terms of Sale 99
  • Invoice Generation
  • Asset-Based Financing
  • Debt Collection Agencies


Chapter 7: Inventory and Working Capital Issues

  • Elements of Inventory Management
  • Inventory Cycle Monitoring: Ratios
  • Inventory Cycle Monitoring: Metrics
  • The Purchasing Function
  • Analyzing Purchasing Activities
  • EOQ and JIT
  • Work-in-Process
  • ABF: Inventory Financing


Chapter 8: Payables and Working Capital Issues

  • Elements of Payables Management
  • Payables Cycle Monitoring: Ratios
  • The Accounts Payable Function
  • Payables Using Internal Processes
  • Payables Outsourcing
  • Check Payments in a Comprehensive Payables Environment
  • Payroll Disbursements


Chapter 9: International Working Capital

  • Capitalism Goes Global
  • The Financing of International Transactions
  • The Foreign Exchange Markets
  • Country Risk Analysis
  • Other Significant Issues in International Working Capital
  • Cultural and Corporate Practices Affecting Working Capital


Chapter 10: Information and Working Capital

  • Information Technology
  • Bank Information Technology
  • Internet Bank Technology
  • ERP: An Alternative Approach
  • Choosing Working Capital
  • Information Systems


Chapter 11: Managing the Working Capital Cycle

  • Risk and Working Capital
  • Traditional Risk Management
  • Enterprise Risk Management
  • The ERM Process
  • Efficiency and Working Capital
  • Working Capital and Liquidity
  • Suggested Actions
  • Developments in Working Capital Management
  • The Gizmo Deal: How Delays Turn Profits into Losses


Chapter 12: Introduction to Working Capital Cases

  • Sequence of the Cases
  • The Concept of the Working Capital Case
  • Case: Widget Manufacturing
  • Suggested Solutions



Cases on Working Capital Management


Case 1: Dinner Bell Hotel

Cash Flow Issues

Alternative Actions

The "Raw" Data



Case 2: Koala Fun

The Partners' First Success

Financial Concerns

Borrowing Issues

Working Capital

Final Thoughts



Case 3: Miller Building Supplies

Joseph Miller Starts MBS

Variations in Working Capital Requirements

A Banker's Assistance



Case 4: Office Smart

The Business of Office Smart

Financial Issues



Case 5: Quacker Cracker

The Attitude toward Debt

Financial Planning



Case 6: Young Brands

Changes in YB's Global Marketing Strategy

Forecasting Considerations


Working Capital Issues

Financial Issues


Appendix I: Basic Financial Concepts

Appendix II: Websites of Working Capital Organizations


About the Author