Working Capital Strategies Research

Working Capital Strategies Research

Running head: WORKING CAPITAL STRATEGIES RESEARCH



Working Capital Strategies Research

November 8, 2008





Working Capital Strategies Research
Receivables often are the second largest asset on a company’s balance sheet and it symbolizes all the supplies that a company uses to market, sell, create, manufacture and ship its merchandise to its consumers. Therefore that makes it safe to presume that account receivables are an extremely valuable company asset. Account receivables need to be protected due to the fact that they are susceptible to the threat of non-payment or even bankruptcy by a consumer just like other assets. The learning team benchmarked several companies with account receivable issues. This paper also includes all of the outcomes, which varied between one another.
Euler Hermes ACI and Marsh USA – Bernadette Reid
"Besides insuring a company against the impact of bad debt due to a customer going out of business or similar scenario, credit insurance can also support various finance-enhancing activities by your lenders," explains Thomas Raspanti, Vice President, Marsh USA (IOMA, 2006). Credit insurance is the guarantee of accounts receivable against non-payment. "Credit insurance is a strategy to transfer and share risk," adds Eugene Goudy, Director of Business Development, ARI Global. "You're creating a new strategy for sales." In Europe credit insurance is well known and 80% of commercial transactions are covered. In the United States 10% - 15% transactions are covered (IOMA, 2006). While a number of bankruptcies are growing rapidly in the United States, the awareness the credit insurance is spreading. Companies like Euler Hermes ACI believes in credit insurance. Mike Deluca who is the senior vice president has credit insurance for his company and he believes that credit insurance is a sales tool, a credit tool and competitive tool. Sharyn Koenig, of the U.S. Export-Import Bank says "On the international...

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