From the course: Foundations of Working Capital Management

Working capital management

From the course: Foundations of Working Capital Management

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Working capital management

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- Walmart has inventory costing $45 billion in its stores worldwide. That's about $4 million of inventory per Walmart store. - Now, is that amount of inventory too much, too little or just right? - [Kay] Chipotle, a U.S.-based restaurant chain selling Mexican food, buys lettuce, meat, and paper products from a wide variety of suppliers. - [Jim] Chipotle buys these items on credit, and then pays those suppliers in 23 days on average. - Now, is that speed of payment too fast, too slow, or just right? - [Jim] If you own a small business, should you accept credit card sales and pay a sizeable fee to a credit card company? - [Kay] Or should you set up your own little credit evaluation department, and let customers buy on credit arranged directly with you? - Hi, I'm Jim Stice. I'm an accounting professor at Brigham Young University. This is my brother, Kay. - I'm also an accounting professor at Brigham Young University. - In this course, we discuss working capital management. - [Kay] We discuss the importance of monitoring and coordinating cash collections from customers, cash payments to suppliers, and arranging short-term bank loans and lines of credit. - We'll talk about JIT, EOQ, and the average collection period. - We might even do a little cash budgeting. - So join us as we talk about working capital management.

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