SUPPLIER FINANCING AS A SOLUTION OF CASH CONVERSION CYCLE PROBLEM CASE STUDY PT MAP AKTIF ADIPERKASA, TBK DURING PANDEMIC COVID-19

• Main Author: Syahputra, Aldi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/54642
• Institution: Institut Teknologi Bandung

PT MAP Aktif Adiperkasa, Tbk (MAPA) is the retailer company. Most of MAPA products are well-known brand. Due to Covid-19 Pandemic, MAPA’s cash conversion cycle (CCC) increased significantly. CCC measures the length of time needed by the company to convert its fund to buy from supplier to be the received cash from the customer. Almost all retailer’ CCC increased significantly in pandemic era, but MAPA is one the worst CCC in retailer industry. MAPA’s CCC increased from 153 days in quarter 2 2019 to 264 days in quarter 2 2020. Due to the nature of MAPA’s business (sell directly to end user), MAPA cannot shorten their account receivable as one of the solutions to shorten the CCC. MAPA’s Average Collection Period (ACP) before Pandemic (quarter 2 2019) was 14 days compare to during Pandemic (quarter 2 2020) was 14 days also. ACP is the ratio of account receivables to sales times by 365. MAPA difficult to reduce their level of inventory, due to the sales of retailer was decrease due to the pandemic. This research provides alternative solution for MAPA’s CCC problem through supplier financing scheme (by lengthening account payable). The result of this research shows this strategy is better compare to conservative financing strategy (through additional long-term bank loan).