The impact of working capital management on credit rating

This study investigates the possible nonlinear relationship between working capital and credit rating.Furthermore,it examines the relationship between the three components of working capital(inventory,accounts receivable,and accounts payable)and a firm’s credit rating.Employing data for U.S listed firms for the period between 1985 and 2017,the results of our ordered probit model show a nonlinear relationship between working capital and its components and credit rating.Finally,we find that the deviation from the optimal working capital adversely affects the credit rating.The results of this study are of significant importance for policy makers,managers,decision makers,and credit-rating agencies,as they help highlight the importance of working capital management for a firm’s credit rating.

Problems and Countermeasures of Working Capital Management in Company V

Working capital is the premise for the production and operation of an enterprise and the basis for all financial management.The management of working capital has gained more attention by enterprises.The purpose of emphasizing the importance of working capital management is to enable enterprises to make full and efficient use of capital.There is a serious shortage of working capital in China's home appliance manufacturing industry,and with the rapid development of home appliance manufacturing industry,the problem is becoming increasingly prominent.Therefore,improving the management level of working capital,optimizing the structure of capital,and improving the efficiency of working capital should become the most important part in the process of daily production and operation.This article selects company V as the research subject as it has representative problems in working capital management.Drawing on the theoretical method of taking elements as the core,this article focuses on the analysis of each working capital project and the development status of the company as a whole,determmes the problems in the aspects of current assets and infbnnation communication in regard to the working capital management of company V as well as puts forward several suggestions in terms of current assets management.In order to improve the working capital management level of company V9 we hope that the improvement suggestions derived from the combination of theory and practical analysis can provide some reference for other enterprises in the household appliance manufacturing industry.

Two-level uncapacitated lot-sizing problem considering the financing cost of working capital requirement

During financial crisis,companies constantly need free cash flows to efficiently react to any uncertainty,thus ensuring solvency.Working capital requirement(WCR)has been recognized as a key factor for releasing tied up cash in companies.However,in literatures related to lot-sizing problem,WCR has only been studied in the single-level supply chain context.In this paper,we initially adopt WCR model for a multi-level case.A two-level(supplier–customer)model is established on the basis of the classic multi-level lot-sizing model integrated with WCR financing cost.To tackle this problem,we propose sequential and centralized approaches to solve the two-level case with a serial chain structure.The ZIO(Zero Inventory Ordering)property is further confirmed valid in both cases.This property allows us to establish a dynamic programming-based algorithm,which solves the problem in O(T).Finally,numerical tests show differences in optimal plans obtained by both approaches and the influence of varying delays in payment on the WCR of both actors.