• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

lawrence problem solution

Extracts from this document...

Introduction

Running head: PROBLEM SOLUTION: LAWRENCE SPORTS INC. Problem Solution: Lawrence Sports Inc. University of Phoenix Problem Solution: Lawrence Sports Inc. Introduction In the current business economy, business entities are highly concerned with maximizing liquidity and ensuring cash optimization (Keeler, 2005). Good cash management is an essential and very important activity of every business entity. "Working capital is truly the life blood of any business big or small." (Unknown author2005) "Working capital is the cash a business requires for its day-to-day operations, and for financing the conversion of raw materials into finished goods, which the entity sells for payment." (Unknown author 2003) An effective and efficient management staff will manage the entity's bottom line of working capital and realize that in order to improve the bottom line, management has to understand the tradeoff of maintaining good relationships with customers and vendors in order to protect their profits. This case will present Lawrence Sports Scenario, trying to illustrate and reveal some points about the working capital management and some changes that can enforce many large corporations to revise their strategic and the way of operating their activates to promote more competitive strategies in order to gain more productivity and profitability in their business. ...read more.

Middle

These interactions help to better understand the markets. Problem Statement A problem arises when trying to maintain business relationships and balancing the organizations working capital and borrowing requirements. This was accomplished in an ethical manner by finding common ground and reaching agreements with all involved. Although this was difficult, at certain points the retailer-Mayo- had to be held to their word for payment in April, so not to create undue burden for Lawrence and its suppliers. This also required the stretching of payments to vendors. It was beyond Lawrence's control. The difference in the possible outcomes of the simulation was the decision to delaying payment to Murray and renegotiate terms with all involved. This allowed the organization to achieve its goals of increasing working capital while decreasing borrowing. End-State Vision As the financial manager of Lawrence Sports the company's cash position is of my highest concern. It is a tremendous part of my duty that I have to take care of the collection and payment policies. Mayo Stores has created difficulty with our working capital management. We have developed options to improve our cash flow and reduce high interest debt. ...read more.

Conclusion

It is necessary to take this into consideration when making the decision to coordinate the financial inflows and outflows. Evaluation of Results Once Lawrence finds the right solution to solve its problems it will notice the difference in its cash, rather than borrowing more money from the bank. Meeting payments on loans that are borrowed must be accomplished in order to make sure there is a consistent inflow of cash. As much as the business relationships are needed to stay strong, the financial situation of the company is a priority. We have a financial responsibility to pay Murray the funds that are due to them, if Gartner does not receive the funds they need they will refuse to deliver their products which will destroy our working relationship. Conclusion Working capital is what floats a business. Without enough cash to pay suppliers, the suppliers will stop supplying necessary products. Managing finances comes with a certain amount of risk, if all money were placed in checking or savings accounts; the chances of growth are slim. Efficiently managing and understanding the related risk is extremely important. Successful negotiations will allow Lawrence to keep the cash flowing without incurring additional bank loan debt. Avoidance of additional bank loan debt will allow Lawrence to eventually develop a positive cash balance and be better prepared for future problems. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Strategic Analysis of Zara Fashion Retailer.

    - 90% of store managers are promoted from inside (Ghemawat and Bueno, 2006) - Managers receive variable compensations based on their store's performance and individual bonuses are linked to the success of teams (Gallaugher, 2008; Ghemawat, 2006) . * Technology development - Information Technologies connect headquarters with supply, production and sales activities, and support efficient communication infrastructures (Ghemawat, 2006).

  2. Business Plan Example

    The price Greenja set for the premium membership is 10 pounds per month, which provides easy access to funding through investors. Unlike some competitors, Greenja chooses monthly fees instead of a yearly fee. Students can easily sign out when they reached a funding and do not have to pay additional costs for a membership, which they do not use.

  1. BUSINESS PLAN FOR ESTABLISHMENT OF

    Market positioning In order to best utilize its competitive advantage and to benefit from the emerging market trends, AMIGOSt decides to promote the following distinctive business traits: o Complex value proposition (one-stop, high-quality product); o Superior product quality We choose particular these two business characteristics, as they are important for

  2. Strategic partnership in airline industry

    The third strategic option was to establish a global presence through marketing alliances with other non-European airlines or making share purchases in them. The point was to enter the markets that were under-represented by the incumbent airline. Obviously, the market choice for the European carriers was the American market and

  1. Tata Nano. The launch of the People's Car by Tata Motors is a defining ...

    The way it is being planned now, it is going to be a rear engine car, essentially steel, with some plastic parts. It will be a five seater with four doors. No decision has been taken as yet on the engine capacity. The car will have a continuous variable transmission.

  2. Perspectives on Managing Knowledge in Organizations

    We outline these processes, using examples from Nonaka and Takeuchi's discussion of how Matushita developed an automatic home bakery product. Socialization is a process of acquiring tacit knowledge through sharing experiences. As apprentices learn the craft of their masters through observation, imitation, and practice, so do employees of a firm learn new skills through on-the-job training.

  1. Manzana Insurance case solution

    Reduce Turnaround time(TAT) by mitigating the issues involved in policy processing Long term objectives: ? Increase the overall profitability of the branch ? Regain the lost market share in the renewal business by reducing TAT ? Try to become the 1st recommended Insurance company amongst the agents spanning different territories ?

  2. Problem Solution: Classic Airlines

    The apparent disconnection between Classic and its customers is also evident in the customer interviews, call monitoring transcripts, and Kevin Boyle's (CMO) customer feedback observations. Classic's competitive ability is increasing lowered by rising fuel and labor costs and a restrictive cost structure due to its post-September 11th overexpansion.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work