An article by Karen Winton and Enid Tsui in CHO Asia (April 2003) explained the importance of working capital management in companies in Asia. They could be using the money for acquisitions or factory expansions, they could be using it for debt repayment, or anything else they fancy. They could be, but they can't because, unfortunately, the money is all locked away in places they don't seem to be able to touch. In addition, these places arc not like time deposit accounts, they arc overdue accounts receivable, over-generous inventory levels and overly prompt bill payments. CFOs could unleash this entire fortune from working capital by conscientiously improving their management of receivables, payables and inventory levels.

Your new CFO has read this article many years ago. Therefore, once he joined your company, he started to look into the working capital management process. Currently, you are working as the finance officer and your CFO has asked you to write a report (1,500 words) (using Harvard Referencing) on how he can release the money locked up in the company's working capital.

You are required to:

- Choose a company of your choice (it must be a Service company). This will help you understand on which areas of working capital (e.g. inventory management, receivable management, payable management, etc.) that you need to focus.

- Critically evaluate the key method and techniques of cash, inventory, receivable and payable management that you would recommend with supporting arguments. In addition, you need to analyse and discuss whether the company should use conservative or aggressive to working capital management

- Understand the economic (for example, interest rates) and competitive environment of your business and incorporate them in your for and against arguments for different types of working capital management policy discussions.

The marking is as follows:

1. Brief background of the company, the economic and competitive environment of the business - The reason for this is that the background will reveal that kind of problems and issues that the organisation need to consider in working capital management and must therefore make decisions on the basis these. You do not need to provide the history of the organisation.

2. Review of different methods of working capital management - what is it, what needs does it MK what arc its key techniques. This is what you have been studying of course. We do not advise that you introduce advanced techniques that you do to understand - you only have 1500 words and cannot do justice to these.

3. The key techniques and methods that you would recommend to the company for working capital management based on (I) and of course the justification/rational for your choice(s). This should include some examples. You do not need to provide more than two techniques/instruments/methods for each part of the working capital management (such as inventory, cash and receivables).

4. The strengths and weaknesses of your analysis - for example the additional information you would have liked in order to improve your analysis. This is not a SWOT analysis of the company it is a self-analysis of your work.