• 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. Leadership Theories - this review seeks to determine which theoretical perspectives, theories and schools ...

    Nevertheless, a dichotomous categorization was considered to dividing the self and identity constructs into those that convey processes from those that express structures. The clustering was performed using common sense. For instance, structures were related to self and identity construct that are part of the individual's schema (e.g.

  2. Strategic Analysis of Zara Fashion Retailer.

    WEAKNESSES * Zara has been criticised for exploitation of workers, thus contradicting its employment policies. * Some company's policies make international expansion difficult - store size requirements clashes with architectonic barriers in some countries like Italy-. The European market is saturated.

  1. Business Plan Example

    Focusing and specialising in serving the specific needs of the students who want to start their own business. This has, up to now, been an ignored segment, except for a few universities, which have recently started with their incubator programmes.

  2. BUSINESS PLAN FOR ESTABLISHMENT OF

    7.2. Marketing trends Increasing number of people raise pets: Pet owners are increasingly treating their pets with more and more care. Hence, customers are more knowledgeable and demanding about the living conditions for their dogs and willing to pay price premium to have their pets cared in a mirror-home surrounding.

  1. Strategic partnership in airline industry

    It continuously increased its stake in various airlines. BA bought 40% share in Brymon Airways in 1987 and subsequently purchased it outright in 1993. Its moves of taking over of British Celadonian in late 1987; 1992 acquisition of principal European and domestic scheduled routes of Dan-Air which eventually helped it

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

    That's why every news and rumors about the low cost car is getting covered in almost every magazines, every newspapers and every web portals even the mighty Business week and BBC is reporting about the developments of the car. The most expected car has also become the most controversial car in Indian history.

  1. Manzana Insurance case solution

    Current TAT is around 6 days on an average, which is also one of the reasons for the backlog. The solution should be able to reduce this value. ? Reduction of Backlog of RERUNs O There has been an accumulation of work caused by the slow process, most of which have been RERUNS.

  2. Problem Solution: Classic Airlines

    Restructuring the Rewards program to better fit customer needs and wants is an opportunity for Classic to improve customer loyalty and retention while remaining within the mandated budget. "Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

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