Advertisement

Relevance of WCM and Its Weaknesses

Chapter
  • 3.1k Downloads
Part of the SpringerBriefs in Business book series (BRIEFSBUSINESS)

Abstract

Working capital and the cash-to-cash cycle are important indicators to reveal supply chain efficiencies. Thereby, the objective is to balance and optimize the amount of working capital to successfully manage a company. Until recently traditional approaches were used to improve working capital mainly focusing on a single company. In contrast, the Supply Chain Finance approach provides opportunities to improve working capital for all parties involved in a supply chain.

Keywords

Working capital management Enterprise value Accounts payables Accounts receivables Liquidity  Profitability Cash-to-cash cycle Prisoner's dilemma 

References

  1. Bhalla VK (2005) Working capital management. Anmol Publications, New DelhiGoogle Scholar
  2. Callioni G, de Montros X, Slagmulder R, van Wassenhove L, Wright L (2005) Inventory-driven costs. Harvard Bus Rev 83(3):135–140Google Scholar
  3. Cheng NS, Cravens K, Lamminmaki D, Pike R (2005) Trade credit terms: asymmetric information and price discrimination evidence from three continents. J Bus Finance Account 32(5/6):1197–1236Google Scholar
  4. Emery DR, Finnerty JD (1997) Corporate financial management, 2nd edn. Prentice Hall, Upper Saddle RiverGoogle Scholar
  5. Farris MT II, Hutchison PD (2003) Measuring cash-to-cash performance. Int J Logist Manag 14(2):83–91CrossRefGoogle Scholar
  6. Flood M (1952) On game-learning theory and some decision-making experiments. RAND research paperGoogle Scholar
  7. García-Teruel PJ, Martínez-Solano P (2007) Effects of working capital management on SME profitability. Int J Manag Finance 3(2):164–177Google Scholar
  8. Hofmann E, Locker A (2009) Value-based performance measurement in supply chains - a case study from the packaging industry. In: Production Planning & Control 20(1):68–81Google Scholar
  9. Hofmann E, Kotzab H (2010) A supply chain-oriented approach of working capital management. J Bus Logist (forthcoming) 31(2):305–330Google Scholar
  10. Hofmann E, Maucher D, Piesker S, Richter S (2011) Ways out of the working capital trap: empowering self-financing growth through modern supply Management. SpringerGoogle Scholar
  11. Howorth C, Westhead P (2003) The focus of working capital management in UK small firms. Manag Account Res 14(2):94–111CrossRefGoogle Scholar
  12. Jose ML, Lancaster C, Stevens JL (1996) Corporate returns and cash conversion cycles. J Econ Finance 20(1):33–46CrossRefGoogle Scholar
  13. Mian SL, Smith CW (1992) Accounts receivable management policy: theory and evidence. J Finance 47(1):169–200CrossRefGoogle Scholar
  14. Moss JD, Stine B (1993) Cash conversion cycle and firm size: a study of retail firms. Manag Finance 19(8):25–38Google Scholar
  15. Ng CH, Smith JK, Smith RL (1999) Evidence on the determinants of credit terms used in interfirm trade. J Finance 54(3):1109–1129CrossRefGoogle Scholar
  16. Pike R, Cheng NS, Cravens K, Lamminmaki D (2005) Trade credit terms: asymmetric information and price discrimination evidence from three continents. J Bus Finance Account 32(5):1197–1236CrossRefGoogle Scholar
  17. PricewaterhouseCoopers (2009) Demystifying supply chain finance—insights into the what, why, how, where and who. http://www.pwc.com/en_US/us/issues/surviving-the-financial-downturn/assets/supply_chain_finance.pdf. Accessed 09 Apr 2010
  18. Rafuse ME (1996) Working capital management. An urgent need to refocus. Manag Decis 34(2):59–63CrossRefGoogle Scholar
  19. Rappaport A (1999) Shareholder value. Schäffer-Poeschel Verlag, StuttgartGoogle Scholar
  20. Reason T (2005) Capital ideas: the 2005 working capital survey. CFO Mag 21(12):88–92Google Scholar
  21. Reider R, Heyler PB (2003) Analyzing sales for better cash flow management. J Corp Account Finance 15(1):15–25CrossRefGoogle Scholar
  22. Richards VD, Laughlin EJ (1980) A cash conversion cycle approach to liquidity analysis. Financial Manag 9(1):32–38CrossRefGoogle Scholar
  23. Ross SA, Westerfield RW, Jaffe J (2005) Corporate finance, 7th edn. McGraw-Hill, BostonGoogle Scholar
  24. Scherr FC (1989) Modern working capital management—text and cases. Prentice-Hall, Englewood CliffsGoogle Scholar
  25. Shin H-H, Soenen L (1998) Efficiency of working capital management and corporate profitability. Financial Pract Educ 8(2):37–45Google Scholar
  26. Shulman J, Cox R (1985) An integrative approach to working capital management. J Cash Manag 5(6):64–67Google Scholar
  27. Soenen LA (1993) Cash conversion cycle and corporate profitability. J Cash Manag 13(4):53–58Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Chair of Logistics Management (LOG-HSG)University of St.GallenSt. GallenSwitzerland
  2. 2.Sumitomo Mitsui Banking Corporation Europe LtdLondonUK

Personalised recommendations