Running head: LAWRENCE SPORTS WORKING CAPITAL POLICY
Lawrence Sports Working Capital Policy Paper
Michael Gipson
University of Phoenix
Lawrence Sports Working Capital Policy Paper
Lawrence Sports is a manufacturer and distributor of sporting goods equipment and protective gear. They have one major customer, Mayo Stores, which supplies 95% of the company revenues for Lawrence Sports. Mayo Stores is a leading world retailer and is in the process of expanding their business internationally. The expansion process has limited Mayo Stores’ ability to make the scheduled payments to Lawrence Sports. This is having a great financial impact on Lawrence Sports business operations (University of Phoenix, 2007).
Lawrence Sports has two primary suppliers: Gartner Products and Murray Leather Works. Gartner Products is the largest supplier, providing approximately 70% of the materials for Lawrence Sports. Lawrence Sports is not a major customer for Gartner Products which could limit financial negotiation abilities. Murray Leather Works is a much smaller company. Murray Leather Works has been able to obtain Lawrence Sports as their primary customer, supplying 75% of their revenues. Negotiations with Murray Leather Works will need to be handled delicately. Delaying payments too long could have a severe impact on Murray Leather Works financial well-being. It will be important to structure agreements with both suppliers which allow for payment flexibility for Lawrence Sports (University of Phoenix, 2007).
Lawrence Sports needs to build and maintain strong relationships with both their ...