• 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...


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.


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.


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 ...

    self and identity constructs seem to be important, to one extend or another, to several of the theoretical perspectives categorized by this study. Nevertheless, it is important to consider that there are some limitations to this analysis, since the results might have been confounded by the number of different self

  2. General Management - organisation, leadership and theories.

    As messages used in downward communication can be a performance feedback, or indoctrination. In upward communication the following message are used: - Problems and exceptions, suggestion for improvement, performance reports, grievances and disputes, financial and according information. In horizontal communication made between coworkers the following messages appear: - Intradepartamental problem

  1. Strategic Analysis of Zara Fashion Retailer.

    the ability to enter into new different markets with fashionable and quality products at competitive prices. * A large population of buyers with little bargaining power exhibits a reasonable degree of commitment and loyalty towards Zara brand. * Zara's strong control over suppliers due to its vertical integration structure helps boost operational efficiency and minimises procurement and distribution mistakes.

  2. Business Plan Example

    Promotion towards consultants To promote its activities amongst consultants Greenja will use personal selling and direct e-mailings. The aim is to build a directory of specialized consultants all over the UK, so that the customers can benefit from their service no matter where they are located.


    entity's core competences (Kaplan and Norton, 2008): Ability to grow: phased-out implementation (see section 7.6.). Ability to adapt: three-stage growing model, which incorporates the main and auxiliary services. Amont the main adaptivity traits, we consider flexibility (transportation to and from the hotel)

  2. Strategic partnership in airline industry

    Transnational alliances as in case of SAS and Swissair, BA-Deutsche BA, TAT and Maersk Air, KLM and Air UK were also observed. These alliances were expected to lead to network economies and the reinforcement of home base, thereby ensuring increased feed and formation of fortress 'Euro' hubs, similar to those in US.

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

    Low cost units in different parts of the country will assemble the car where Tata Motors will take the responsibility for training on site and other aspects related to quality etc. We will give young entrepreneurs the opportunity to establish enterprises in distributed areas to produce this for us.

  2. Manzana Insurance case solution

    Expand and gain specialization into the commercial insurance business Criteria for Evaluation In considering the various options to deal with the problem, some of the criteria for evaluating them are: ? Reduction in the Turnaround Time O The turnaround time is a critical indicator of how long it takes to process the average request from start to end.

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