Working capital postion
Its been a rather glamorous 18 montyhs, with sales just huge, says, CFO of PT Astra international , the US $4 billion in sales Indonesian automakes. Idonesia is on the growth path again, and a new breed of consumer is eager for a first vehicle-motocycles - as well as Astra's more premium brands of HOndas and Toyotas. And one of the most beautifyl parts of the proposition is that working capital managemetn seems to be taking care of tiself. Depending on the business, and counting trade receivalbes, only we have between eight and 19 days working captial . which is manageable given the company,s steady frowth. One of he reasons tha t working capital has not expanded at the rate of the busines is invetory, or ratiher the dearth of it . We.'re in a market that responds vert strongly to new poducts says te manager and the oresales of products are very high. We have advaced orders from four the six months. With depostis paid, and this helps our cahs postion, Best fo all as soon as a vehicle is off the assembly line, it,s out the dealer. We have low inventory costs and teh product lines are very easy to move. The salutary role of banks in working capital management is one reason that cashflow has improved in his business. Better management is a result of baking competition that has allowed the company to move from traditional bakers. the ste-owned Inidan institutions , to mroe competitive private institutions and the foreign banks that partner with them. These banks have invested in technology, allowing a visibillity over cashflow unheard of five years ago.

Explain the concept of working capital.

Explanation

Working capital refers to the captial requoired for carrying out day-to-day activites of the business. it is required to bear the operating costof business.
WC= CA -CL
Working= Current -Current
Capital Assets Liabilities