Chapter 4: Working Capital and Liquidity

In this section

• Cash Conversion Cycle Components and Analysis
  Learn how to measure and optimize the Cash Conversion Cycle (CCC), a key metric for evaluating working capital efficiency by analyzing DSO, DIO, and DPO, with practical examples and strategies.
• Managing Receivables, Payables, and Inventory
  Explore advanced yet practical strategies for managing receivables, payables, and inventory, including credit policies, payables optimization, and inventory control techniques aligned with IFRS and US GAAP.
• Measuring Liquidity (Ratios and Metrics)
  Explore essential liquidity ratios, interpret their trends, and understand practical applications in managing short-term financial obligations.
• Short-Term Funding Strategies and Sources
  Explore key short-term funding options, including lines of credit, trade credit, commercial paper, and more, to effectively manage corporate liquidity and working capital.
• Approaches to Working Capital Policy (Aggressive vs. Conservative)
  An in-depth exploration of aggressive and conservative approaches to working capital management, focusing on liquidity risk, financing choices, trade-offs, and best practices for corporate issuers.
• Short-Term Credit Rating Implications
  A deep exploration of how short-term credit ratings influence a company's cost of funds, liquidity management, and working capital strategies.
• Factoring, Asset-Based Lending, and Alternative Financing
  Discover key ways to convert receivables into immediate cash, navigate loans secured by assets, and leverage modern peer-to-peer and crowdfunding channels for flexible liquidity management.
• Liquidity Stress Testing
  Explore how firms evaluate short-term cash requirements under adverse conditions using best practices, scenario analysis, and targeted contingency planning.
• Supply Chain Financing (Reverse Factoring)
  An in-depth exploration of how reverse factoring programs optimize working capital, reduce costs, and manage relationships within the supply chain, illustrated with practical insights and examples.