FIN 419 Week 3 Discussion question 1

At one time I heard that Dell was operating with zero net working capital (NWC).  They would make computers once the order was placed and the payment had been made.  The cash came in as an asset (cash), which was offset by the liability of unearned revenue.  It must have taken them a while to get everything in place, so they did not start with zero NWC.  It sounds great for a business model and I believe it worked well for Dell.  Has anyone else heard of a company that has done this?

 

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