Advanced model for working capital management: bridging theory and practice

Sari Viskari, Anita Ruokola, Miia Pirttilä and Timo Kärri

International Journal of Applied Management Science, 2012, vol. 4, issue 1, 1-17

Abstract: The paper introduces an internal information tool, the advanced cash conversion cycle (ACCC), for controlling the amount and cost of working capital, by refining and extending the concept of the weighted cash conversion cycle. The ACCC model has been developed with a real world value chain case from the pulp and paper industry, and it addresses issues overlooked in the prior model. The ACCC offers visibility through the value chain, elimination of the problem of a negative margin, a more simple calculation of accounts payables compared to the prior model, and new metrics to control working capital in companies.

Keywords: working capital management; operating cycle; cycle time models; value chain; modelling; cash conversion cycle; weighted cash conversion; pulp and paper industry. (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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