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The Lawrence Sports Simulation
Finance & Accounting
Pages 6 (1506 words)
SPORTS SIMULATION The Lawrence Sports Simulation: A Recommendation Report Word Count: 1,500 I. Introduction Lawrence Sports is an organization that boasts $20 million in revenue every year. Its chief product distributor is a chain of stores called Mayo, which has locations in the U.S., Canada, South America, and Europe.
There must be: three alternative working capital policies which reduce future difficulties; a recommendation on policy and an evaluation of risk associated with the recommendation; contingencies for the recommendation; performance measures used to evaluate the recommendation; an implementation plan for the recommendation; a discussion and explanation of the recommendation; a review of the cash conversion cycle for Lawrence Sports; an explanation of the importance of the cash conversion cycle to its working capital management; and a conclusion. II. Three Alternative Working Capital Policies Which Reduce Future Difficulties There are three working capital policies which have to be put in place in order to reduce future difficulties as a company. First and foremost, Lawrence Sports must realize that it can’t make more payments than purchases—as it started to do the week of March 31st—and expect to make a profit. Therefore, the company must make a policy to ensure that it is always taking in more money than it is spending. The second thing that Lawrence Sports must do is ensure that all of its vendors are paid in full without leaving capital build up in order to pay off its debts. For example, it was mentioned that Gartner was paid off 40% upfront, and then 60% in the next week. This should not be so. ...
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