Lawrence Sports Problem Solution

Situation Analysis Lawrence Sports is a manufacturing and distribution community of sporting goods. Currently, the company is facing several situations that take outer opportunities as well as problems that need to be evaluated. First of all Lawrence Sports has a hard cash flow problem, whenever there is a deficit situation, m angiotensin converting enzymey is borrowed from the depone to tide them over. Lawrence is basely robbing peter to pay Paul. If Lawrence continues to operate in this manner it leave alone put a strain on their business partners or stakeholders. Lawrence made it through the week of work by borrowing from the bank and deferring allowance to Gartner by one week. The exposestanding loan and amour burden drop withal gone up; Lawrence needs a better project to manage the cash flow. In this paper I will take a closer look at Lawrences predicament and determine a viable solution that will change magnitude cash inflow so their will be out flow to pay debt and working capital to handle unanticipated circumstances. Issue and Opportunity Identification Lawrence Sports principle customer, Mayo Stores, is having a difficult time paying for the products on time. The current payment arrangements are that Mayo will pay 20% on purchases and 80% the following week. Because Mayo is the principle customer at 95%, L.S.

is placed into a situation where they in plow cannot pay its creditors on time. There is a plan B. cast B is to have Central Bank do a daily loan for any amount to keep the calculate at $50,000. The problem with this is that L.S. has reached the maximum amount that can be borrowed, which is $1.2 million. Having the Central Bank loan comes with its down falls. To pay off the loan Lawrence has to come up with $1.2 million and 16% interest to bring the total to $1,392,000. The reason for the bank borrowing is that L.S. unless has one major source of income and it is not enough to accommodate the needs of the out flows of cash. Each week L.S. needs to have ending revenues of $400,000 to maintain the $20 million a year.... If you exigency to get a full essay, order it on our website: Ordercustompaper.com

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