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Working Capital Policy for Wh Smith Plc

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WORKING CAPITAL POLICY OF WHSmith PLC

OLUKAYODE OMOSEBI
MBA -8A
A4032655
ACF: ACCOUNTING AND CORPORATE FINANCE
TABLE OF CONTENT
INTRODUCTION………………………………………………………………………………………..3
WORKING CAPITAL POLICY…………………………………………………………………………5
WHSmith: WORKING CAPITAL POLICIES………………………………………………………6
CASH CONVERSION CYCLE………………………………………………………………………..10
KEY ISSUES……………………………………………………………………………………………..11
RECOMMENDATIONS ………………………………………………………………………………12
CONCLUSION………………………………………………………………………………………….15
REFERENCES…………………………………………………………………………………………..16
APPENDICES…………………………………………………………………………………………..17

INTRODUCTION
WHSmith PLC is one of UK’s leading retailers and is made up of two core businesses – Travel and High Street. Travel stores sell a tailored range of products to cater for people on the move or in need of a convenience offer. High Street sells a wide range of products which are divided into four categories: Stationery (including greetings cards), Books, and News and Impulse (including newspapers, magazines, confectionary and other impulse products), as well as a convenience offer of Entertainment products. High street’s trading is seasonal, peaking at Christmas, with other peaks at Easter and in August and September for the ‘Back to School’ range.
WHSmith aims to build on its position as the UK’s most popular bookseller, stationer and newsagent by continuing to grow its strongly performing Travel business and delivering its High Street plan. It aims to improve the company’s profitability and cash flow generation, delivering sustainable returns to shareholder.
Its working capital cycle is the sequence of transaction and events, involving its current assets and current liabilities, through which it makes profit. Inventories (stocks), receivables (debtors) and cash are all current assets of the business. Creditors (payables) who have supplied goods to the…...

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