Skip to main content

Leverage Cash Flow with Inventory Management: A case in Automotive Parts Supplier

Effective Working Capital and Cash Flow Management is one of key financial targets of top companies because Working Capital (the speed at which assets can convert into cash) has always been crucial to the long-term financial health. As the top management of company, how often do you check your company health-deck? The most easy way to check the effectiveness working capital that is look at Inventory level of the company.

This article is fictitious case based on working experience of the author, it can be take as an example (framework) for your company to optimizing Cash Flow with Inventory management.


Comments

Unknown said…
Hi anh! Is metric of company X given as an example, especially the number of DSO,DPO in chart "cash to cash life cycle"? ( or it's written according to any source?")

Thank you for explanation.

Hieu Nguyen said…
Hi em. Yes this number is only an example, not a specific company here; the data shown in this case is fictitious that used only to demonstrate the approach. The benchmark has been referred by PwC Website (my mistake didn't input the source). Thank you em!
Prince said…
Accounting ratios I would like to say that this blog really convinced me to do it! Thanks, very good post.
Moolamore said…
Effectively managing inventory is a balancing act that requires careful planning and ongoing attention. By implementing these strategies, businesses can optimize their inventory levels, reduce holding costs, and leverage cash flow more effectively. Regularly reviewing and adjusting inventory management practices in line with business needs and market conditions is key to long-term success.

Moolamore is an advanced accounting application that analyzes, manages, and projects real-time transaction data. Using our cash flow forecasting software and app, you can forecast and estimate your company's future financial position. Financial Management