Working Capital Challenges for International Operations

Question

The components of a firm’s working capital are cash, accounts receivable, inventory, and accounts payable. Any CFO’s objective is to ensure that current assets less current liabilities—known as net working capital—is a positive number, while also not having an excess of money tied up in non-productive activities. Write a memo to your CFO about the following:

How does managing the following components of working capital becomes more of a challenge when dealing internationally than domestically?
    A. Accounts receivable
    B. Inventory

Include examples of each case.

Summary

The question belongs to Finance. The question here is about the importance of working capital. A memo to the CEO of a company has been given here. The finance department discusses the importance of working capital management and its importance for the long term survival of the company.

Total Word Count 540

 

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