Problem:
The components of a firm's working capital are cash, accounts receivable, inventory, and accounts payable. Any CFO's objective is to ensure that current assets less current liabilities-known as net working capital-is a positive number, while also not having an excess of money tied up in non-productive activities. Write a memo to your CFO about the following:
How does managing the following components of working capital becomes more of a challenge when dealing internationally than domestically?
A. Accounts receivable
B. Inventory
Include examples of each case.
Additional Information:
The question belongs to Finance. The question here is about the importance of working capital. A memo to the CEO of a company has been given here. The finance department discusses the importance of working capital management and its importance for the long term survival of the company.
Total Word Limit: 540 Words