Product details

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Published by: El Izi Communications Consultancy UK Ltd
Originally published in: 2021
Revision date: 09-Mar-2021

Abstract

Brisa Bridgestone Sabanci has been the undisputable market leader of the Turkish tyre market for many years; having two production plants covering 500 thousand square metres closed area, with 13 million tyres annual production capacity. However in 2016 Brisa was faced with a cash flow problem, its total liabilities reaching its gross profit level. Initial analysis showed that the problem was not stemming from the income statement but from the balance sheet. So in Summer 2017, Brisa started a new action plan to improve its working capital by improving its 1) Days of Sales Outstanding (DSO); 2) Days of Inventory Outstanding (DIO); 3) Days of Payable Outstanding (DPO) figures. In the case we see how Brisa tackled each of these variables between 2017-2019, reducing the working capital from 192 days in December 2016, to 41 days in June 2020. We also witness how working capital factors actually affect the whole company. Through the cooperation and collaboration of all departments at Brisa, the working capital turnover rate was speeded up to 8.9 times in June 2020 from the initial 1.9 times at the end of 2016. In the Teaching Notes, working capital is covered in detail, including liquidity ratios and cash conversion cycles with real-life exercises.

Teaching and learning

This item is suitable for undergraduate courses.

Time period

The events covered by this case took place in 2020.

Geographical setting

Region:
Europe
Country:
Turkey
Location:
Istanbul

Featured company

Brisa Bridgestone Sabanci Tyre Man and Trading Inc, Istanbul, Turkey
Employees:
1001-5000
Turnover:
USD 627,7 million (2019)
Type:
Public company
Industry:
Manufacturing

Featured protagonist

  • Resat Oruc (male), Brisa Bridgestone Sabanci CFO

About

Abstract

Brisa Bridgestone Sabanci has been the undisputable market leader of the Turkish tyre market for many years; having two production plants covering 500 thousand square metres closed area, with 13 million tyres annual production capacity. However in 2016 Brisa was faced with a cash flow problem, its total liabilities reaching its gross profit level. Initial analysis showed that the problem was not stemming from the income statement but from the balance sheet. So in Summer 2017, Brisa started a new action plan to improve its working capital by improving its 1) Days of Sales Outstanding (DSO); 2) Days of Inventory Outstanding (DIO); 3) Days of Payable Outstanding (DPO) figures. In the case we see how Brisa tackled each of these variables between 2017-2019, reducing the working capital from 192 days in December 2016, to 41 days in June 2020. We also witness how working capital factors actually affect the whole company. Through the cooperation and collaboration of all departments at Brisa, the working capital turnover rate was speeded up to 8.9 times in June 2020 from the initial 1.9 times at the end of 2016. In the Teaching Notes, working capital is covered in detail, including liquidity ratios and cash conversion cycles with real-life exercises.

Teaching and learning

This item is suitable for undergraduate courses.

Settings

Time period

The events covered by this case took place in 2020.

Geographical setting

Region:
Europe
Country:
Turkey
Location:
Istanbul

Featured company

Brisa Bridgestone Sabanci Tyre Man and Trading Inc, Istanbul, Turkey
Employees:
1001-5000
Turnover:
USD 627,7 million (2019)
Type:
Public company
Industry:
Manufacturing

Featured protagonist

  • Resat Oruc (male), Brisa Bridgestone Sabanci CFO

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