You maneuver, we help you develop a forward-looking view and ensure future growth.
As a CFO, Director, or Sales Manager you need to manage with account receivable and the payment terms of your supplier.
Process your procurement Export-Import of raw materials and logistic fees linked with the benefit of our Supply Chain Finance service to reduce or improve your invoicing management account.
Working capital management is defined as monitoring and optimizing company assets and liabilities to ensure the most efficient business operations.
Our post-shipment supply chain service for export raw materials offers you a competitive advantage and stabilizes your supply chain.
This strategically managing process consists for;
- By improving the collection of sales invoices (Days Sales Outstanding) for the outstanding customer invoices, off-balance sheet.
- Reduce the outstanding supplier invoices (Days Payables Outstanding), and the volume value of inventory to ensure the business has the right amount of cash on hand.
- Improving your company margin by using our dynamic discount invoices in relation to our strategic manufacturers.
- Advance up to 80% of your Commercial Invoice, and the Cash cycles by extending your payment terms to up to 120 days.
This Working capital optimization is managed by your analysis company operations through the Cash Conversion Cycle;
– The time it takes to convert stock of raw materials into a “work-in-process” status and then finally finish the product to be sold.
– To understand where more cash is needed and where excess cash can be reinvested, such as an optimization of the Working Capital Requirement.
NWC or Net Working Capital Requirement estimates are derived from the array of assets and liabilities on a corporate balance sheet.
Current assets listed include cash, accounts receivable, inventory, payable, wages, taxes payable, and the current portion of long-term debt that’s due within one year.
The standard formula for NWC is current assets minus current liabilities.
Current Assets - Current Liabilities = Working Capital
Interpreting your working capital ratio isn’t black and white, several factors can affect this analysis and point of view of your business health.
It all depends on your industry, growth phase, or even the impact of seasonality. For instance, you just purchase or hire to service a contract with a large new client, then your ratio fluctuates as your assets increase.
However, this is a percentage, showing the relative proportion of your company’s current assets to its current liabilities.
A good working capital ratio is considered to be 1.5 to 2 and suggests a company is on the solid financial ground in terms of liquidity. Less than one is taken as a negative working capital ratio, signaling potential future liquidity problems.
An exception to this is when negative working capital arises in businesses that generate cash very quickly and can sell products to their customers before paying their suppliers.
“Cash flow is and will remain the sinews of war,”
Analysis of the working capital requirements to ensure future business growth, to determine working capital requirements,
and understanding any changes ensure margin for your company.