Abstract

This Case deals with the use of forfeiting in international trade to improve a company's liquidity position and reduce its exposure to payment risk. Japan Glass Company is a large company that supplies products globally, including many developing countries. The company is facing a serious liquidity problem that has been caused largely by a slowing of its accounts receivable collections, specifically from developing countries. The CFO of the company is considering the use of forfeiting as a means of mitigating this risk and improving cash flow for the company.

 

Teaching
The case is useful for gaining an understanding of methods of improving cash flow management while at the same time mitigating international payment risks. It is designed to illustrate the benefits and costs associated with using forfaiting techniques to accelerate payment on trade receivables. It is also useful to gain comparative information on the techniques available to sell receivables.

Case number:
A06-01-0009c
Subject:
Finance
Year:
Setting:
Japan
Length:
4 pages
Source:
Library/Field