Working Capital Management Relevant In The 21st Century Finance Essay

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In these contemporary days, all businesses trying to keep their working capital management at high level and also trying to get with 21th century .Up to date, the main aim for all business are to survive, to exist and to struggle each other; so this requires keeping a proper working capital management against unexpected events resulting from the future. Two companies, Arçelik a.ÅŸ. which was established at 1955 by Rahmi Koç , has 22,000 workers and 14 facility around world and 8,4 billion Tl revenue within ; Vestel a.ÅŸ.

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which was established at 1953 by Mehmet Zorlu that wants to become worldwide company continued export oriented growth strategy and has 15 000 workers , were chosen for this case study. Quality racing and competition of last 10 years helped home appliance industry has in large degree in Turkey. Immediately after, beginning of consumer awareness led businesses into competition.Thus, among the companies which are operating in the same sector, Arçelika.ÅŸ. And Vestel A.S. should have the right working capital management mechanism to survive. Moreover, by checking of Arçelik and Vestel working capital management, it can be said that which kind of problems they will face and will affect on the market. For example, DSO , DPO , DIO and CCC have to be low and also CCC must close to shortest(smallest) level which is company reach , minimum level of CCC represent effective operation and cash management for companies ,so after analysis which will be made , the right comments can be made about Arçelik and Vestel. In the end, depending on the results and problems, the right recommends can be mentioned. 2. Introduction It can be said that 3 phases in business life; First one is introduction part for investors’ ideas and plans, Second phase is that the investment which is decided to be made by investors and turning out of the company. In the last phase, going into operation of a company, meaning that, providing of all equipments, labor force, starting to produce and to sell of all products. Importance of working capital management arises. Working capital management is the most important component of business activities, and focuses on short term investments and investment decision of companies’ success of company depends on having enough of net working capital and being of good quality. This is Due to the success of a company related with power of paying its debts. , capable of finding new credits and also having a good net working capital. At the first instance this easily explains why working capital management is so important for progress. Whether an international company or a domestic company, all principles of working capital are the same for all institutions. Thus, companies decide that how much amount of investment will be made and how to finance them by taking into consideration of risks and stability.

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