2.3  Working Capital 3.0 Management Letter 3.1 Debtors Management 3.2 Inventory Valuation As at 31 December 2017, the working capital position of the  Institute showed current assets of P315.59 million and current  liabilities of P82.97 million resulting in a net current asset position  of P232.62 million.  The following were some of the significant matters raised by the  auditors and the management responses thereto:  The auditors observed that the Institute’s trade receivables balance (gross trade receivable: P59 million as at year-end) was  significantly high compared to revenue for the year (P83 million),  which indicated delayed payments by customers. Management  had performed an assessment of the balances and concluded  that substantially all balances were recoverable. The assessment  of recoverability was done at an individual customer basis as the  nature of the customers was such that the credit profiles and  associated risks were unique to each customer. The auditors own  testing of the recoverability of year-end receivables indicated  that the provisions carried were adequate. As at year-end, the auditors noted that the performing debtor  balance within the credit period was P33.3 million and past due  debtor balance was P26.8 million. The auditors noted that the finished goods inventory held by the  Institute had increased by P14.8 million compared to prior year  due to a significant decline in sales while production remained  relatively the same as in the previous period. The decline in sales  resulted in the company holding onto inventory, as its shelf life  diminished, hence the need to provide P3.5 million against  vaccines expiring in the near future with no good prospects of  sales and the write-off of P1.5 million of expired vaccines. During the year, the auditors noted that a new multi-currency  procurement module was implemented to move from manual  receipting of goods. The auditors’ testing revealed that there  were a significant number of entries proposed to correct exchange gains/losses that arose due to incorrect rates used  upon receipt of goods as at the year-end. However, the  171 