...Capital Working Strategies FIN/414 December 18, 2014 Richard Nashner Working Capital Strategies Walmart is on the path of expanding its brand; this paper highlights its finances by looking at its recent financial reports- balance sheets and statements of cash flow. By doing so, we can therefore make a projection or forecast Walmart’s revenue for 2015. Such projection comes with working capital recommendation, and the new lesson learned from previous financial reports of the company. Working Capital A review of Walmart’s financial statements shows that its net working capital had range from positive to negative and vice versa. Walmart current revised assets total $61,185 billion; an increase of two percent in 2014. The current liabilities in 2014 total $69,345 billion and $71,818 billion in 2013 (Walmart, 2015). This information indicates that Walmart working capital in was negative in 2014 with a balance of -$8,160 billion, which obviously reflects a long term liabilities. In 2013, its working capital was also in the negative of -$11,878 billion; this notwithstanding reflects a decrease of its working capital by over three million dollars. According to Walmart (2015), “ The decrease in our working capital deficit was primarily attributable to a decrease in long-term debt due within one year and an increase in our inventory levels due to lower than anticipated sales across the Company” (p. 27). Walmart as per its first quarter report in 2015 intend to decrease...
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...British Journal of Economics, Finance and Management Sciences September 2012, Vol. 5 (2) The Effect of Working Capital Management on the Profitability of Turkish SMEs Ece C. KARADAGLI Cankaya University, Department of Banking and Finance Eskisehir Yolu 29. km, Ankara, 06810, Turkey Phone: (90) 312 233 12 04; Fax: (90) 312 233 10 27 E-mail: ece@cankaya.edu.tr 36 Abstract This paper focuses on the effects of working capital management as measured by cash conversion cycle and net trade cycle on the firm performance for a sample of Turkish listed companies and searches for potential differences between the profitability effects of working capital management for the SMEs and for the bigger companies with an accompanying aim to examine whether net trade cycle can efficiently substitute for cash conversion cycle as a measure of working capital management. The research is conducted for the period of 2002-2010 by using pooled panel analysis with annual data. The findings suggest that an increase in both the cash conversion cycle and the net trade cycle improves firm performance in terms of both the operating income and the stock market return for SMEs where as for bigger companies a decrease in cash conversion cycle and net trade cycle is associated with enhanced profitability. Besides, the findings also imply that managers can use net trade cycle instead of cash conversion cycle confidentially. Keywords: cash conversion cycle, net trade cycle, firm performance, SMEs, emerging economies...
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...UK introducing flexibile working arrangements. Tutor Name: Debora Brito Student ID Number: 2253710 Date of Submission: Monday 9th May 2016 before 2 pm Content 1.1 Introduction——————————————————————————3 1.2 Background——————————————————————————3 1.3 Presentation of requirements——————————————————-4 * 1.3.1 Effects on employees————————————————————-4 * 1.3.2 Effects on employers————————————————————-4 * 1.3.2 Flexible working in SMEs——————————————————-4 2.0 Analysis———————————————————————————-5 * 2.1 Analysis of effects on employees———————————————-5 * 2.1.1 Advantages and disadvantages of employees—————————5 * 2.2 Analysis of effects on employers———————————————-5 * 2.2.1 Advantages and disadvantages of employers—————————5 * 2.3 Flexible working in SMEs——————————————————-6 3.1 Conclusion—————————————————————————-6 3.2 Recommendation——————————————————————-7 4.0 Reference—————————————————————————-8 1.1 Introduction Flexible working arrangements(FWAs) is defined as giving employees flexibility on how long, where and when they work(ILM,2013). It is also a way of working that suitable for the employees.Almost all large enterprises to provide flexible working, 95% of small and medium-sized...
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...order to get double or triple salary? Why or why not?" ➢ Sean More: Thank you for your suggestion. I think this is a widely versed topic and could be taken into consideration for serious debate. Many businesses today face this challenge due to consumer demands surrounding holidays. This is also a topic of interest to many employees across the nation. ➢ Lien Ho: I agreed with your point of views on the topic "Should we work on holidays in order to get double or triple pay". You are absolute right when saying that businesses today face this challenge due to consumer demands on holidays across the nation. Beside that big issue which you already mention on this topic, I also have some points need to share as a working mommy. I understand the feeling of hard working parents on these special days while our lovely kids and other members in our family keep asking: "Why don't you spend time with us on this wonderful days?", "Will you go home early because I will count on every minutes until you come back home?" ... My heard is always broken badly whenever I heard the kind of such questions. ➢ Katie: I believe the topic of "Should we work on holidays in order get double or triple pay" has some valid discussion points. Each year business much determine which holidays, if any, the business plans on shutting down completely and if so, do employees get paid days off. Closing the company for even one holiday can mean loosing a lot of financial gain in addition to the added cost of...
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...Chapter: Working Capital Management 1.Definition of Working Capital: 1.The capital which is required to finance current assets is called working capital. 2. That is in operating daily business of the firm effectively, some resources are needed and the capital which are needed to finance, these resources is called working capital 3. “Working capital may be defined as all the shot term assets used in daily operation”—John. J Harpton. 4. Short term assets of a firm means cash money, short-term securities, inventory, Bill receivable, note receivable, Debtors etc. 5.In operating daily business, fixed assets are also needed in addition to current assets. Though some fixed assets help on the daily operation of a firm, these can’t be told as working capital, because these can’t be converted into cash in this current accounting period. So, the assets which can be converted into Raw Material from cash---R/M—Finished Goods—B/R—Cash and helps in operating daily business of the firm, is called working Capital. Working capital is also called ‘Trading Capital”, Circulating capital/Short term capital /Short /Current Assets management. 2.Concepts of Working Capital: There are 2 concepts of working capital. 1. Gross working capital. 2. Net Working capital. 1. Gross Working Capital: In fact, working capital means Gross Working Capital. It means the firm’s investment in current assets. Current assets are the assets which be converted into cash within an accounting period or one year (normally)...
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...Trends in Working Capital Management and its Impact on Firms’ Performance: An Analysis of Mauritian Small Manufacturing Firms Kesseven Padachi* A well designed and implemented working capital management is expected to contribute positively to the creation of a firm’s value The purpose of this paper is to examine the trends in working capital management and its impact on firms’ performance. The trend in working capital needs and profitability of firms are examined to identify the causes for any significant differences between the industries. The dependent variable, return on total assets is used as a measure of profitability and the relation between working capital management and corporate profitability is investigated for a sample of 58 small manufacturing firms, using panel data analysis for the period 1998 – 2003. The regression results show that high investment in inventories and receivables is associated with lower profitability. The key variables used in the analysis are inventories days, accounts receivables days, accounts payable days and cash conversion cycle. A strong significant relationship between working capital management and profitability has been found in previous empirical work. An analysis of the liquidity, profitability and operational efficiency of the five industries shows significant changes and how best practices in the paper industry have contributed to performance. The findings also reveal an increasing trend in the short-term component of working capital...
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...Working Practices Full-Time This type of working practice means an employee will work a specified number of hours depending on their contract of employment. The standard hours for this are Monday to Friday 9-5 but this is very much dependant on the industry you are working in and full time work is usually determined by the total number of hours undertaken each week on a recurrent basis e.g. 35, 37, 39 hours would all be considered full time. Advantages to Employer: the same person is doing the job all of the time and they will therefore be more likely to have a high level of skills and expertise in that job. Advantages to Employee: ability to earn more benefits relating to job. Regular working pattern which can help with things such as child care. Forward planning for holidays etc. Disadvantages to Employer: Lack of flexibility in working hours. Disadvantages to Employee: Also lack of flexibility in terms of needing time of at short notice etc. Less time to spend with family and friend if you are working full time. Part-Time Employees will work an agreed number of hours per week; this could mean a reduced number of hours per day or a reduced number of days per week. This will again be dependent on the environment they are working in. Advantages to Employer: increased flexibility, overheads can be reduced, shared workload amongst staff. Advantages to Employee: increased work/life balance (see additional notes – Work/Life balance), less likely to become stressed,...
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...Mid Sweden University Department of Social Sciences Business Administration D Master Thesis Fachhochschule Aachen Fachbereich Wirtschaftswissenschaften Europäischer Studiengang Wirtschaft Diplomarbeit THE IMPACT OF WORKING CAPITAL MANAGEMENT ON CASH HOLDINGS – A Quantitative Study of Swedish Manufacturing SMEs Author: Place of Birth: 1st Examiner: 2nd Examiner: Tutor: Term: Due Date: Maxime Abel Frankenthal, Germany Prof. Håkan Boter (Mid Sweden University) Prof. Dr. Jürgen Stephan (Fachhochschule Aachen) Dr. Darush Yazdanfar Summer 2008 May 30th, 2008 Abstract This study examines the impact of working capital management on cash holdings of small and medium-sized manufacturing enterprises in Sweden. The aim of this work is to theoretically derive significant factors related to working capital management which have an influence on the cash level of SMEs and test these in a large sample of Swedish manufacturing SMEs. The theoretical framework for this study consists of a treatise of motives for holding cash, working capital management and cash level. From these theoretical findings, two hypotheses are deduced: • H1: Cash holdings are negatively related to the presence of cash substitutes • H2: Cash holdings are positively related to working capital management efficiency The quantitative investigation consists of the statistical analysis – namely comparison of means and correlation analysis – of key figures which are calculated from the financial statements of...
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...Park Avenue Response When it comes to the topic of the working class, most people in today’s society would agree that the rich people have nothing to worry about financially. Where this statement would become controversial is whether or not the system is rigged by giving more opportunities to advance to the rich. The assumption is the U.S economy seems to be failing the majority of the working class who do not have the luxury of being rich. In the documentary “Park Avenue”, it is said that the rich have more opportunities to advance in today’s society. I agree to this statement, but I think that it is only true because the rich already have the money to do whatever it is that they would like to do. The rich can continuously invest in their money to make it possible to accumulate more money. However, for the working class, hard work is no longer enough to keep up with every day expenses. Many jobs available today are low-wage positions without benefits and no opportunities for advancement. Because of the low paying jobs, 40 hours a week is no longer the average amount of hours a person is working a week. Many people now have a part time job to supplement the income given from a full time job. Even with two jobs, many people still do not have the ability to have an adequate amount of money saved in a savings account. “Education is the key to upward mobility,” is stated by the author. Financial aid and grants are still easily obtainable but...
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...May 2012 Flexible working provision and uptake Contents Summary of key findings Flexible working provision – employers’ policies and practices Formal/informal flexible working arrangements Flexible working and the law Right to request flexible working Flexible working regulations and tribunal claims Access to and uptake of flexible working among employees Employee perceptions of the flexible working arrangements provided by employers Uptake of flexible working Flexible working uptake, by size of organisation worked for Flexible working uptake, by seniority of employees Employees that would like to work flexibly if given the opportunity Benefits of flexible working Benefits of flexible working: employees Satisfaction with work–life balance and employee engagement Satisfaction with work–life balance support Barriers to introducing flexible working Flexible working trends Background to the report Conclusions 2 4 7 9 10 14 15 15 16 18 18 18 21 22 24 25 27 30 33 34 Flexible working provision and uptake 1 Summary of key findings Background to the survey This report is based on survey responses from more than 1,000 employers and 2,000 employees. The employer survey is weighted to be representative of industry in the UK in relation to size, sector and type of business. The employee survey is weighted to be representative of the UK workforce in relation to sector and size (private, public, voluntary), industry type and full-time/part-time working by gender. Both surveys...
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...Working Capital Management in a Post-Recession Environment: The View from Europe A report prepared by CFO Research Services in collaboration with The Royal Bank of Scotland TM Working Capital Management in a Post-Recession Environment: The View from Europe A report prepared by CFO Research Services in collaboration with The Royal Bank of Scotland TM Working Capital Management in a Post-Recession Environment: The View from Europe Contents Executive summary Cash, liquidity and credit during an uncertain recovery Pursuing improvements in working capital An opportunity to expand the toolkit Investing in working capital improvements Conclusion Sponsor’s perspective 2 3 5 7 11 12 13 © 2010 CFO PUBLISHING LLC SEPTEMBER 2010 1 Working Capital Management in a Post-Recession Environment: The View from Europe Executive summary In June and July of 2010, CFO Research Services (a unit of CFO Publishing LLC) conducted an electronic survey among senior finance executives representing mid-size to large companies in Europe. Our goal was to understand finance executives’ concerns with working capital management in the wake of global recession, as well as their plans for improving working capital performance. We asked finance executives a series of questions about the impact that the recession had on their working capital management, which areas of working capital their companies would focus on during the course of economic recovery and whom their companies worked...
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...WORKING CAPITAL DEFINITION OF WORKING CAPITAL Working Capital = Current Assets - Current Liabilities ❖ Current Assets are - ➢ Customer Outstanding ➢ FG Inventory ➢ WIP ➢ GIT ➢ Other Current Assets ➢ Vendor Debits. ❖ Current Liabilities are - ➢ Customer Advances ➢ Vendor Credits etc. ❖ +ve WC signifies requirement of money and vice versa ❖ Analogous to Cash Inflow – Cash Outflows Working Capital Budgeting/ Monitoring of Various Parameters Customer outstanding – Amount receivable from the customer for progress / pucca invoices raised including the retention money both for divisible and indivisible contracts. Tax deducted at source by the customer should form part of outstanding until customer issue TDS certificates. For divisible contracts, the outstanding represent gross amount of the invoices less pure advance and milestone payments received. For indivisible contracts, the outstanding represent gross progress bill amount less pure advance, milestone and progress payments received. Format for computation of customer outstanding |Month |April 01 |. |. |Mar2002 |Average | | |1 |2 |3 |12 ...
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...SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN INTERNATIONAL BUSINESS WORKING CAPITAL MANAGEMENT On Kotak Mahindra Group INDUSTRY GUIDE FACULTY GUIDE AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA AMITY UNIVERSITY – UTTAR PRADESH TABLE OF CONTENTS Chapter No. Subject Page No. Ch No.1 Executive Summary…………………. 6 Ch No.2 Research Methodology……………… 7 2.1 Primary Objective(s)…………. 2.2 Hypothesis…………………… 2.3 Research Design……………… 2.4 Sample Design……………….. 2.5 Scope of the Study……………. 2.6 Limitations……………………. Ch No.3 Critical Review of Literature……….. 9 Ch No.4 Company Profile ……………………. 18 Ch No.5 Industry Profile……………….. 21 Ch No.6 SWOT Analysis…………………. 45 Ch No.7 Data………………………………….. 46 7.1 Collection……………………… 7.2 Primary Data…………………… 7.3 Secondary Data….…………….. Ch No.8 Working Capital- Overall View……… 53 Ch No.9 Findings & Analysis…………………. 100 Ch No.10 Recommendations…………………… 112 Ch No.11 Bibliography…………………………. 114 Ch No.12 Annexure…………………………….. 115 12.1 Tables…………………………. 12.2 Graphs………………………… Ch No.13 Case Study...…..................................... 117 Ch...
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...Raw materials cost Tk. 50 per unit Direct labor cost 20 per unit Overheads cost 40 per unit Total cost 110 per unit Profit 30 per unit Selling Price Tk.140 per unit You are also given the following additional information: (i) Average Raw material in stock: One month (ii) Average Raw materials in process: Half a month (iii) Stock of Finished goods: 30 days (iv) 20% of sales are cash sales (v) Expected cash balance is: Tk. 100.000 (vi) Credit allowed to debtors: Two months (vii) Credit allowed by Creditors: 45 days (viii) Time Lag in payment of wages: 15 days (ix) Time lag in Payment of Overhead: 1 month You are required to prepare statement showing the working capital requirement if level of activity of the company is at 70,000 units. Solution: First we should calculate the investment in all current assets: A. Investment in Inventory: 1) Inventory in Raw material: Consumption of Raw material x R.M. Conversion Period = Tk. 291,667 360 days 70,000 Units x Tk.50 = X 30 days 360 days (2) Inventory in work in progress: Cost of Production x W.I P. Conversion Period = Tk.3,20,833 360 days 70,000 Units x Tk.110 x 15 days 360 days (3) Finished Goods Inventory: Cost of Sales = X Finished goods conversion period 360 days 70,000 Units x Tk.110 = X 30 days 360 days Tk. 6...
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...CHAPTER – 1 INTRODUCTION 1. INDUSTRY PROFILE Technology generation in the Indian tyre industry has witnessed a fair amount of expertise and versatility to absorb, adapt and modify international technology to suit Indian conditions. This is reflected in the swift technology progression from cotton (reinforcement) carcass to high-performance radial tyres in a span of four decades. Globalization has led to the linking of the economies of all the nations and therefore major Indian players in the tyre industry are pursuing global strategies to enhance their competitiveness in world markets. The present section broadly undertakes an overview of the Indian tyre industry through an examination of its growth trends with respect to production, exports and acquisition of technological capabilities. Key Features At present there are 40 listed companies in the tyre sector in India. Major players are MRF, JK Tyres, and Apollo Tyres & CEAT, which account for 63 per cent of the organized tyre market. The other key players include Modi Rubber, Kesoram Industries and Goodyear India, with 11 per cent, 7 per cent and 6 per cent share respectively. Dunlop, Falcon, Tyre Corporation of India Limited (TCIL), TVS-Srichakra, Metro Tyres and Balkrishna Tyres are some of the other significant players in the industry. While the tyre industry is largely dominated by the organized sector, the unorganized sector is predominant with respect to bicycle tyres. The industry is a major consumer of the...
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