Working Capital for Lawrence
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Working Capital for Lawrence Sports Company
Working Capital for Lawrence Sports Company
Lawrence Sports is a sporting goods company that distributes and manufactures sporting equipment for various sports. The company has annual revenue of $20 million; this has established Lawrence Sports as a leader in the industry. Mayo stores are the leading retailer franchise for Lawrence Sports. Ninety-five percent of annual sales come from Mayo Stores. Gartner Products and Murray Leather Works are Lawrence Sport’s two main suppliers. Gartner Products is an industry leader owning 37% of the market with revenues over $200 million. Lawrence Sports sources about 70% of its raw materials from Gartner, with not much negotiating power. Murray Leather Works is a significantly smaller company than Gartner with annual company revenues at $10 million. Lawrence Sports has an effective partnership with Murray because they make up for about 75% of Murray’s sales.
It is recommended that Lawrence Sports’ capital operating structures are evaluated. In this recommendation, we will evaluate three alternative working capital policies in order to find which one is best for Lawrence Sports future. These alternative working capital policies proposed to reduce future difficulties for Lawrence Sports. Lawrence Sports needs a working capital policy that will reduce their debt and increase their growth overall as a company. The company’s current capital comes from them financing through credit lines. Lawrence Sports needs to reduce their overhead by creating a more solid working capital. This paper will review Lawrence Sports current working capital policy, address three new alternative working capital policies, and recommend a proposal policy that will address the current issues that they are facing.
Three Alternatives
The Aggressive Approach offers short-term financing, lower interest rate, and greater profit but with greater risk. The risk of short-term financing is the...
Working Capital for Lawrence Sports Company
Lawrence Sports is a sporting goods company that distributes and manufactures sporting equipment for various sports. The company has annual revenue of $20 million; this has established Lawrence Sports as a leader in the industry. Mayo stores are the leading retailer franchise for Lawrence Sports. Ninety-five percent of annual sales come from Mayo Stores. Gartner Products and Murray Leather Works are Lawrence Sport’s two main suppliers. Gartner Products is an industry leader owning 37% of the market with revenues over $200 million. Lawrence Sports sources about 70% of its raw materials from Gartner, with not much negotiating power. Murray Leather Works is a significantly smaller company than Gartner with annual company revenues at $10 million. Lawrence Sports has an effective partnership with Murray because they make up for about 75% of Murray’s sales.
It is recommended that Lawrence Sports’ capital operating structures are evaluated. In this recommendation, we will evaluate three alternative working capital policies in order to find which one is best for Lawrence Sports future. These alternative working capital policies proposed to reduce future difficulties for Lawrence Sports. Lawrence Sports needs a working capital policy that will reduce their debt and increase their growth overall as a company. The company’s current capital comes from them financing through credit lines. Lawrence Sports needs to reduce their overhead by creating a more solid working capital. This paper will review Lawrence Sports current working capital policy, address three new alternative working capital policies, and recommend a proposal policy that will address the current issues that they are facing.
Three Alternatives
The Aggressive Approach offers short-term financing, lower interest rate, and greater profit but with greater risk. The risk of short-term financing is the...