WORKING CAPITAL MANAGEMENT AT PRODUCTION HOUSE KITA: DEALING WITH CASH SHORTAGE CHREYZA YOSHUA P

• Main Author: YOSHUA P./ 29116177, CHREYZA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/26248
• Institution: Institut Teknologi Bandung

In any business planning plays an important role where bad production planning might be a beginning of a disaster or proper planning may be a strong competitive advantage. In a movie production or advertisement, planning is everything. While poor pre-production may hurt the quality of our product, lack of due diligence will definitely break our budget. Creating financial planning is essential, it helps production house see the big picture and set a long term and short term goals, a crucial step in mapping your financial futures. When we have a financial plan, it is easier to make financial decision and stay on the track to meet our goals. <br /> <br /> <br /> The main objective of this research are to identify the root cause of cash shortage that resulted in depleted working capital and to provide solutions to PH KITA problem to improve PH KITA financial situation. For this research, The Cause Mapping and 5 whys Method used to find the root cause of why production house can suffer from cash shortage which will affect working capital in production house. <br /> <br /> <br /> It can be concluded from the cause mapping method and 5whys method that cash shortage occur because the production house has no financial planning that will result to depleted working capital. To achieve that problem solution pro forma income statement analysis is used as profit planning for upcoming project and cash budget analysis as cash planning to simulate upcoming condition to avoid cash shortage in the upcoming project. The use cash conversion cycle to determine the element that make production house take a long time to generate their cash from a project, production house might have to pay attention about account receivable and credit terms to avoid high number of cash conversion cycle that will lead to huge amount of cash shortage. From other method also found some other mistakes that resulted in cash shortage that influence working capital: Production house make debt with high interest without proper calculation, and do not pay attention regarding to average collection period and average payment period that lead the production house revenue is hampered in a uncertain period of time, Regarding to pecking order theory conservative strategy is more preferable over aggressive strategy. <br />