Challenges of Managing Accounts Receivable and Inventory for MNCs

Challenges of Managing Accounts Receivable and Inventory for MNCs

The components of a firm’s working capital are cash, accounts receivable, inventory, and accounts payable. Any chief financial officer’s (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 nonproductive 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?
  • Accounts receivable
  • Inventory

• Be sure to include examples of each case.