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Capital Strategies

What working capital strategies can a company employ to maximize shareholder wealth?

What challenges do companies face when they try to employ growth strategies that require international expansion?

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Please find my response below.

1. There are several working capital strategies that a company can employ to maximize shareholder wealth. One of the techniques is to tighten the credit standards to customers. Of course, the company needs to be careful doing this because it should not lead to decreased sales. However, if the company can improve the receivables turnover without impacting sales, then that would boost the cash the company has. Another strategy is to loosen their payable standards. The company can delay payments to suppliers provided that it is not loosing any discounts. This will also ensure that the company has more cash at its disposal. The more cash the company has the more it can disburse to its shareholders as dividends. Also, more the cash, more the resources for investments and growth opportunities. Thus, a ...

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