International Enterprises (12/07)

Dear Sir,

In International Enterprises, part b, The divident capacity = 24m – 5.1m = 18.9m.
Why do we exclude 5.1m from the dividend capacity? The reduction in working capital may come from credit policy changes, process improvements, etc. then these changes generate cash. In my opinion this cash (5.1m) can be distributed to sharedholders as dividends. So dividend should be 24m. Please advise why in the solution 5.1m is excluded.

THanks,
DT