Net Working Capital Standards

This is the dollar value of dealership’s Net Working Capital determined necessary to sustain the level of operations of the dealership envisioned in the contractual agreement between the dealership and manufacturer. Many manufacturers recompute the “standard” periodically based on the dealership’s actual operating practices. The guide calculation is based on the dealer’s operating practices for non-cash accounts, plus an average month expense supply of cash.

Synonyms:
Recommended Minimum Working Capital
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