Running head: LAWRENCE SPORTS WORKING CAPITAL POLICYLawrence Sports Working Capital indemnity PaperKatrina L. BaileyUniversity of PhoenixLawrence Sports Working Capital Policy PaperA manufacturer and distributor of equipment and protective(p) gear for baseball, football, basketball and volleyball, Lawrence Sports is a mid-sized company with $20 billion in revenues. Its principal customer is Mayo Stores, the world?s largest retailer, which accounts for 95% of Lawrence?s sales. Lawrence Sports has two principal suppliers, Gartner Products and Murray Leather Works. Although Gartner is liable for providing 70% of Lawrence?s raw material, Lawrence is not one of Gartner?s major customers. However, accounting for 75% of sales for Murray Leather Works, Lawrence is considered a major customer whose working bully policies could negatively shock absorber Murray?s already weakened cash in position (University of Phoenix, 2008).
ane of the main reasons companies fail is their inability to flirt working capital requirements. In do to maximize the firm?s set over the long run, the company must first be able to consider its short-term obligations. As a result, an effective, efficient working capital polity is essential to the long-term extract of any company. At Lawrence Sports, an ineffective working capital policy is wreaking havoc on the company?s ability to meet its short-term liabilities.
Cash balances are not adequate to meet working capital requirements and the company finds itself borrowing heavily from its denotation line, and incurring higher and higher costs of credit. In order to fix their working capital woes, Lawrence Sports must address issues concerning their cash fertilize budgeting, cash balance requirements, and their current credit polices as they relate to both their customers and their suppliers. In addition, the company must follow up a short-term financing plan that will befriend them minimize or eliminate their current cash flow gaps, and establish metrics that will allow them to measure the expertness of...
If you want to get a full essay, wisit our page: write my essay .
No comments:
Post a Comment