In order to improve the monitoring of the financing activities a new working capital reporting (WCR) solution was designed and implemented at a large commodity trader with the goal to allocate working capital directly to the operational business activities. New functionalities had to be designed and developed in order to support the end to end business process (front office, risk management, back office, accounting, cash flow management).
The aim was to report daily and monthly working capital consumption by “trading strategy” level. Additional key performance indicators such as WACC and Return on Average Capital Employed (ROACE) needed to be calculated by the same solution to allow calculating the financing cost of each “trading strategy” and to allocate them directly to the daily P/L.
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