BU283 Chapter Notes - Chapter 15: Cash Conversion Cycle, Accounts Payable, Current Asset
Document Summary
Walmart supply chain: continuous process where you complete your order at the store and then a notification gets sent to them to order more and then you order more, numbers for inventory management are strong. Working capital: net working capital = current assets current liabilities, networking capital to total capital, what portion is getting invested in unproductive short term assets = networking capital/(total assets current liabilities) Operating and cash cycles: cash conversion cycle calculation, operating cycle: the length of time it takes to order an input to the time it takes to get a finished product. Procurement (receives raw materials), payment (the gap between procurement and payment explains the relationship between accounts payable), processing, sale (procurement to sale stage represents inventory) and collection (sale to collection represents accounts receivable) Approaches to working capital management: conservative approach: High levels of current assets cash inventory and generous with customer credit. Method of financing with long-term debt and equity.
