Running head: WORKING CAPITAL POLICY PAPER
Working Capital Policy Paper: Lawrence Sports
Larry Sailes
University of Phoenix
MBA 550
Lawrence Sports Working Capital Policy Paper
In a competitive business world, successful organizations understand the importance of critical-thinking in the decision-making process. To make sound business decisions, organizations must combine strategic planning with comprehensive data analysis, which includes the evaluation of financial and non-financial records and processes. Management and those involved with maintaining the company’s financial health use a variety of tools, methodologies, and performance metrics to gain a better understanding of the company’s current financial state, create reliable forecasts, and formulate and implement solutions for the company.
Organizational leaders realize that to make the most optimal decision, the company has to fully evaluate all aspects of the company’s operations including policies and procedures. Using Lawrence Sports (“Lawrence”) as the main subject of the case study, this paper will provide recommendations on how Lawrence’s working capital policy should be crafted. The working capital policy is imperative to Lawrence’s success because the policy serves as a strategy on how the organization can maximize its resources. “The working capital policy is the firm’s policy about its working capital level and how its working capital should be financed… decisions about how much to keep in its cash account, what level of inventory to maintain, and how much to allow receivables to build up” (Danh, 1999). The working capital policy also includes handling creditors, debtors, inventory, and possibl ...