Page 10 - PowerPoint Presentation

MANAGEMENT OF WORKING CAPITAL

Cash Management

• Ways of relieving cash flow problems include

the following:

• offering settlement discounts to debtors

• factoring debtors (although this is a drastic and expensive
step!)

• increasing the bank overdraft

• reducing inventory levels, thereby reducing holding costs

• extending creditor payments

• selling assets that are not earning sufficient returns

• enter into sale-and-leaseback agreements

• not paying dividends

• not undertaking (or extending) routine asset replacements

• negotiating with the SARS to pay off taxes due, over a

specified period

• cost cutting

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