Supply Chain Finance - Cash flow strategy, financial engineering, or fraud?
Автор: The Banker Next Door
Загружено: 2026-01-23
Просмотров: 2
The collapse of auto parts supplier First Brands in 2025 has put a spotlight on the cash flow technique known as Supply Chain Finance (SCF). This is also known as “factoring receivables” or “collect early, pay late.” The problem with SCF is that it can distort a company’s actual cash flow position. It can make cash on hand look a lot stronger by pushing off payments to vendors and moving debt to accounts payable on the balance sheet. In the case of First Brands, they took SCF to an extreme and ultimately committed fraud. For many companies in the business world that use SCF every day, it works fine if it is not abused. Everything in moderation, as the saying goes. This episode reviews an article from The Wall Street Journal (subscription required) titled “The collapse of a car-parts supplier puts spotlight on how cash flow can lie” and an article from Investopedia titled “Supply chain finance: What it is, how it works, example.”
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