A Study On The Impact Of Supply Chain Finance On The Financial Performance Of Lenovo

Abstract

This Study Investigates The Strategic Adoption And Impact Of Supply Chain Finance (SCF) On The Working Capital Management And Financial Performance Of Lenovo, A Global Technology Company. SCF Involves A Set Of Financial Tools Designed To Optimize Cash Flow Across The Supply Chain, Bridging The Gap Between A Buyer's Desire For Extended Payment Terms And A Supplier's Need For Immediate Liquidity. The Research Utilizes Secondary Financial Data From 2019 To 2024 To Evaluate The Key Working Capital ComponentsDays Payable Outstanding (DPO), Days Sales Outstanding (DSO), And The Cash Conversion Cycle (CCC)and Their Optimization Through SCF Tools Like Reverse Factoring Key Findings Suggest That Lenovo Has Successfully Leveraged SCF To Strategically Extend Its Payment Terms, Resulting In A Significant Improvement In Its DPO And A Net Reduction In Its Cash Conversion Cycle. This Approach Effectively Converts A Short-term Liability (payables) Into A Long-term Strategic Advantage By Stabilizing The Supplier Base And Securing Favorable Operational Costs. The Study Concludes That SCF Is A Critical Strategic Tool For Technology Companies Operating With Complex Global Supply Chains, Leading To Enhanced Liquidity, Financial Stability, And Stronger, More Resilient Supplier Relationships.

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