1.Research

Energy Working Capital Management As companies look to improve earnings in their core businesses, we at Oliver Wyman believe that a satisfying opportunity exists for most utilities to more aggressively manage their operative pileus and interchange flow. In particular, our experience has shown that: High variableness in performance exists among utilities, with some companies operating at up to seven times the working capital levels of their peer assort Beyond just improving the balance sheet, addressing the root causes of exorbitance working capital can streamline day-to-day operations and improve earnings Our clients have been impressed with the savings up to 50% of working capital and 5-15% of related depreciates (e.g., infrastructure, labor and financing).  umpteen utilities have a solid opportunity to improve cash flow by diminution working capital. Reduce Accounts receivable natural opportunity: 5 - 35 days Reduce/optimize Inventory 5 - 30- days Extend Accounts payable 20 - 35 days Cash flow increases: $15 - 95 million per $1 billion of revenue $15 - 85 million per $1 billion of O&M cost $55 - 95 million per $1 billion of O&M cost Eliminating excess working capital can also boost earnings by reducing related infrastructure, labor, and financing costs.

Action Reduce accounts receivable Earnings impact Reduce knotty debt through accelerated collections trim labor costs as receivables become more current (collections, terminations, etc.) Lower interest expenditure as cash flow increases Reduce/optimize inventory diminution warehouse space Reduce obsolete inventory Lower staffing levels Lower interest expense and depreciation Extend accounts payable Optimize equipment casualty/terms/discounts tradeoff Lower potential interest expense as payment terms are renegotiated There is a wide range in performance among utilities, offering significant improvement potential for many. Accounts receivable days 80 65 Inventory days... If you want to sting a full essay, order it on our website: Orderessay

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