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Exxon Mobil

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Review ExxonMobil's most recent 2-3 years financial reports (balance sheet, statements of cash flow, managements comments, and footnotes to the financial statements) to explain how each of the current asset and liability accounts have affected the cash management strategies. In addition, assume next year's forecasted revenues will increase by 20%. Provide a detailed working capital recommendation to senior management based on the next year's increase in revenue along with the assumptions you make regarding all of the other financial line items in the pro forma financial statements. Be sure to discuss the impact of this revenue increase on the firm's working capital policy. In your conclusion, identify lessons learned and discuss areas for further development. Be sure to properly cite your references.

Explain how each of the current asset and liability accounts have affected the cash management strategies.

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Solution Preview

If we observe the balance sheet of Exxon Mobil in the last 2 years, the only notable or major change appearing in the current assets and current liabilities account is in the area of Accounts Receivable and Accounts Payable. The company's accounts receivable for the financial year ending 31 December 2008 was 18707 million dollars, as compared to 30775 and 25076 in the previous couple of years. It is also to be noted that such decline was accompanies with an increase in overall sales. This goes to show that company has significantly improved on its collection strategies/policies and have significantly reduced the accounts receivable amount which, in turn, boosted its working capital and cash position. The company's collection department has done an outstanding job in terms of reducing the credit extended to the buyers of the company. Other items in the current assets category were relatively similar to ...

Solution Summary

Review ExxonMobil's most recent 2-3 years financial reports (balance sheet, statements of cash flow, managements comments, and footnotes to the financial statements) to explain how each of the current asset and liability accounts have affected the cash management strategies.

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