Wednesday, 24 October 2012
Learning Objective
To understanding the important components of working capital and their role of working capital management. Learning Outcome After the discussion students will be able to understand the importance of cash in managing working capital.
Discussion Question Regional Textile Limited (RTL) purchases raw material from various vendors with an average payment period of 45 days. Most of the sales are on credit and average collection period is 50 days. There is a gap between the cash collection and payment as the management is unable to recover debts within 45 days.
Required What measures can be taken by RTL to reduce the above stated gap ?
