One strategy, in particular, which Wal-Mart uses is a concept called Negative Working Capital. This occurs when goods are received and sold by the company before the goods are due to be paid for. Cash is generated more rapidly than needed. Thus, suppliers can be paid as they come due without delay or need for renegotiations...
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This occurs when goods are received and sold by the company before the goods are due to be paid for. Cash is generated more rapidly than needed. Thus, suppliers can be paid as they come due without delay or need for renegotiations. Operating with a negative working capital can mean two things: 1) a sign of managerial efficiency, or 2) a company in trouble or facing bankruptcy...
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Lawrence Sports Working Capital Policy Paper A cash budget would help LS in showing when cash is needed to pay bills. If the bill is due before payment is received, then that could indicate a need for financing until payment is received...	8 / 2118
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