Details
- Looks at all aspects of working capital from both a finance and investment perspective.
- Provides a comprehensive view of working capital management, an issue that academics have often ignored.
- Takes a close look at actual cases and discusses the observed patterns in working capital around the world.
As soon as a firm starts operating and furthermore, the moment it starts to grow, it needs to come to a decision about how to invest funds, how much cash and inventory to hold on to, how much financing to provide to customers, how to obtain the necessary funds, how much debt to take on and in which terms-all the answers to these questions have serious consequences for a firm's cash flow and profitability.
Working Capital Management is a hands-on look at the crucial decision of how to define and finance the operating investments of a business. Starting with an overview of the fundamental framework of corporate finance, the authors set out to define the central, and usually underestimated, role that working capital plays within this structure. They show not only how to prevent the losses that result from mishandling of working capital, but also how to fully exploit the strategic potential that intelligent, expert management of working capital allows. The book is the first to emphasize the relevance of the interplay between the investment and finance aspects of working capital, by discussing all of the main components of a firm's operating expenses from both an investment and finance perspective. After focusing on the varying aspects and themes of working capital, such as inventory management, strategic accounting, trade credit, and short-term debt, the authors move on to identify the long-term implications and opportunities raised by this often overlooked aspect of corporate finance.
Lorenzo Preve and Virginia Sarria Allende have at last provided a resource that identifies the impact of day-to-day business decisions, uncovering a highly influential, aspect of all firms' financial situation.
Readership: General Managers and functional managers of firms and corporations, participants of executive management programs, MBA and Executive MBA students.
Lorenzo Preve, Associate Professor of Finance, IAE Business School - Universidad Austral, Argenti, and Virginia Sarria-Allende, Assistant Professor of Finance, IAE Business School - Universidad Austral, Argenti
Lorenzo Preve is an associate professor at IAE Business School, Universidad Austral. His main research interests are in corporate finance, with a special emphasis in corporate risk management, working capital management and restructuring and financial distress. He is also interested in the applications of corporate finance to emerging markets. Lorenzo holds a PhD in Finance from the University of Texas at Austin. Virginia Sarria-Allende is an associate professor at IAE Business School, Universidad Austral. Her research links to all corporate finance applications, such as cost of capital, corporate valuation, working capital management, corporate restructuring, etc., with special focus in emerging markets. Virginia holds a PhD in Finance from Columbia University.
"Given the breadth of recent capital market disruptions, companies have undergone a thorough reevaluation of their capital structure objectives. Working capital management choices have become strategically more important as they have a direct impact into financial sustainability. This book gives light to a very complex subject in a very easy to understand manner."--Lisandro Miguens, Managing Director, Senior Country Officer, J.P. Morgan
"A welcome return to basics for financial managers. This book moves the focus away from the fashionable topics of credit default swaps and exotic options and back to tried-and-true principles of working capital management. Written in a clear and simple style, the book explains how the financing of operating investments affects the financial performance and survival of the firm-a lesson whose relevance has been highlighted by recent financial events. A classic subject more timely than ever. An important book for every manager's desk!"--F. Asís Martínez-Jerez, Harvard Business School
"The working capital concept has increasingly gained popularity as a simple and efficient tool to contribute business management. With this book, Lorenzo Preve and Virgina Sarria-Allende contribute in a comprehensive way not only traditional patterns of understanding this concept but also freshner and updated approaches. They go though these topics with rich and actual examples based on their academic and business backgrounds and illustrate the real concepts behind the traditional ones. It also shows how companies that value and manage working capital best can more effectively execute strategies in hard times."--Maria Victoria Zingoni, Director of Investor Relations, Repsol YPF
