Lawrence Sports
...adhere to the basics of business strategy which is to be profitable and continually increase revenues for shareholders. Working capital is defined as "the assets of a business that can be applied to the operations" or "the amount of current assets which exceed the current liabilities" (Answers, 2007, para. 1) Working capital management involves the "deployment of current assets and current liabilities as to maximize short-term liquidity" (The Free Dictionary, 2007, para. 1). The intent of a working capital management policy is to ensure an organization is able to continue business operations and has adequate ability to satisfy both short-term debt and upcoming operational expenses. Simply stated, "good management of working capital will generate cash, improve profits and reduce risks" (Anonymous, 2007, para. 2).
Lawrence Sports, a manufacturer and distributor of sporting goods equipment, is currently facing a number working capital and cash flow management issues largely related to past due payment of their largest customer, Mayo Stores. This paper will take a closer look at Lawrence Sports' simulation and identify the issues, goals, potential solutions, evaluate risks and define metrics to measure the success of the working capital management strategy selected to address the short and long-term financing needs of the organization.
Problem Solution: Lawrence Sports Inc.
In today's business world in order for an organization to walk the path of technological advancement, increasing profits and remain one step ahead of the curve, businesses must possess the ability to solve problems effectively and efficiently. There are different ways to approach defining the problems facing an organization; the focus needs to be on defining the problem correctly (University of Phoenix, 2007).
The context of the paper will examine the simulation of Lawrence...
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