Working Capital Optimization Can Yield Real Gains

Payne, Stephen
September 2002
Financial Executive;Sep2002, Vol. 18 Issue 6, p40
Academic Journal
This article reports on the optimization of working capital to yield real gains and potentially pay down debt, buy back stock or even increase the company's dividend. One example described a company that freed up over $200 million, which was used to complete an acquisition. Optimizing working capital management practices in the customer to cash (C2C), purchase to pay (P2P) and forecast to fulfill (F2F) cycles can free capital to accomplish other business priorities. As a result, the most effective working capital optimization programs will address all three activities.


Related Articles


    The ability of States to manage the financial flows is one of the nations' competitiveness factors in modern global economy. This factor is especially significant because of growing competition for the world-wide financial resources and investments. The results of State's ability in this field...

  • Firm Size as Determinant of the Nonlinear Relationship Between Bank Debt and Growth Opportunities: The Case of Chilean Public Firms. Hoffmann, Paolo Saona; Bertín, Mauricio Jara; Warleta, Marta Moreno // Emerging Markets Finance & Trade;Jan/Feb2014 Supplement, Vol. 50, p265 

    We analyze the extent to which firm size determines the relationship between growth opportunities and bank debt in the Chilean corporate sector. Using generalized method of moments (GMM) system estimator techniques in an unbalanced panel data of quoted firms, we provide evidence of a U-shaped...

  • Transactional Lending: Debt Hangover Relief for Overleveraged Entrepreneurs Satisfies Lenders. Ingrassia, Joseph F. // Secured Lender;Dec2012, Vol. 68 Issue 11, p24 

    The article discusses a scenario among entrepreneurs who are not able to obtain financing from lenders due to existing substantial debt hangover. It describes the risk for lenders such as banks due to conditions of forbearance that restricts working capital for borrowers and the entrepreneur's...

  • THE COST OF PRIVATE VERSUS PUBLIC DEBT ISSUES. Karna, Adi S. // Financial Management (1972);Summer72, Vol. 1 Issue 2, p65 

    This article analyzes the effective cost of privately placed as opposed to publicly placed debt issues in terms of quality rating. This article presents an analysis of the effective cost of privately placed as opposed to publicly placed debt issues in terms of quality rating. For this study...

  • Do Better Institutions Mitigate Agency Problems? Evidence from Corporate Finance Choices. Giannetti, Mariassunta // Journal of Financial & Quantitative Analysis;Mar2003, Vol. 38 Issue 1, p185 

    This paper examines how firm characteristics, legal rules, and financial development affect corporate finance decisions. In contrast to the existing literature, I use data on unlisted companies to show that institutions play an important role in determining the extent of agency problems. In...

  • Chapter 14: Working capital management. Tennent, John // Guide to Financial Management;2008, p251 

    Chapter 14 of the book "Guide to Financial Management," by John Tennent is presented. It explores on the effective ways of managing the working capital, which aims at minimizing the number of days a business waits before settling its accounts with the suppliers. It highlights on the several...

  • MEASURING WORKING-CAPITAL EFFICIENCIES AT BEST BUY. Gosman, Martin L.; Ammons, Janice L. // Allied Academies International Conference: Proceedings of the In;Apr2012, Vol. 19 Issue 1, p21 

    The primary subject matter of this case is the introduction of a new metric that can be used to gauge the degree to which retailers have achieved working-capital efficiencies. Financial-statement data for Best Buy is used to illustrate how this metric provides insight into the multiple ways in...

  • Beyond the norm.  // Finance Week;8/25/2003, p68 

    Highlights the benefits of debtor financing. Use of working capital as sales increase; Qualification for early payment discounts from suppliers; Reduction of debt; Improvement in the balance sheet; Factors to consider when considering debtor financing.

  • Morgan Stanley is the Latest Bank to Cut From High Yield. Appin, Rick; Husband, Sarah // Bank Loan Report;11/25/2002, Vol. 17 Issue 46, p11 

    Presents a news roundup pertaining to bank loans and debt financings that have been approved or are still being negotiated, as of November 25, 2002.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics