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Problem Solution: Lawrence Sports Inc.
In an effort to optimize a company's performance, it is important for a company to identify potential solutions and implement a strategic financial management plan. Lawrence Sports is a manufacturing and distribution company of sporting goods currently faced with a range of issues. If these issues are managed properly, Lawrence can turn these issues into opportunities for increased profitability and improved business operations. Some of the issues Lawrence faces include collecting payment from a primary customer who has defaulted on it's debt for goods and services, cash inflow and outflow inconsistencies, maintaining sufficient cash reserves, and debt accumulation and payment plans. Lawrence Sports outflows exceed inflows and the shortfall is being made up by a credit line that is maxed out. Not only is the credit line maxed out, but it carries with it an interest that fluctuates depending on the amount borrowed. Within this paper, I will take a closer look at Lawrence's dilemma and determine a viable solution that will increase cash inflow so that Lawrence will have adequate outflow to pay debt and working capital to handle unforeseen circumstances.
Situation Analysis
Issue and Opportunity Identification
Lawrence Sports has a multitude of issues that the company needs to address. If the company effectively addresses these issues, the company will be able to make a positive change toward better working capital management. In addition, Lawrence Sports will be able to enjoy growth and wealth. Lawrence's finance team failed to carefully identify the company's goals in terms of developing a working ...