Alfa Spain

In October 1997, Byko, a Spanish automotive system supply concern, won a door panel contract for the Seat Cordoba. Two years later, the Spanish unit which had won the project had been sold to Alfa Automotives Co. (Alfa), and representatives from the sales and production departments were assessing the impact of a new project, a door panel (DP), to be manufactured for the Seat Cordoba on the net working capital and the short term financing needs of the company. The case provides students an opportunity to analyze the financial impact of a new contract on the different drivers of the firm¿s Net Working Capital. It explains the links between some of the purely operational aspects of the new contract with the firm¿s need for additional funds for financing this contract.