Lawrence Sports Simulation

Lawrence Sports Simulation

Lawrence Sports incorporation is a major supplier of sportswear and equipment. The company manufactures and distributes products for baseball, basketball, football, and volleyball teams. The corporation generates $20 million a year in revenue and partners with Mayo Stores, Gartner Products, and Murray Leather Works to create sustainability and growth. Currently, Lawrence Sports CFO Stephanie Sanders has appointed LMS (Lozzio, Murray, and Soto) Financial Group to assist in effective capital management strategies, benchmarking techniques, and developing a sustainable cash flow plan (UOP, simulation, 2010).

LMS Financial Group will evaluate Lawrence Sports current partnerships and supply chain systems. By re-assessing accounts receivable, inventory (current assets), and accounts payable will create a positive cash flow for the company. Implementing a new financial contingency plan will increase liquidity, reduce risk and cash flow dilemmas, and analyze quarterly financial reports to predict forecasting and WACC (weighted average cost of capital) assets for future sales.

Three Alternative Working Capital Policies to Reduce Difficulties

Optimizing cash flow is essential for Lawrence Sports. Under the direction of the LMS Financial Group, the firm will need to control payables and maintain strong relationships with suppliers, retailers, shareholders, and consumers. To achieve working capital, Lawrence Sports must remove risk from the supply chain while maximizing accounts receivable, inventory, and accounts payable to improve the DPO (Days Payable Outstanding) and the DSO (Days Sales Outstanding). Unfortunately, Lawrence Sports is developing substantial issues receivables, inventory, and accounts payable, which LMS will need to reorganize to minimize the firms risk and partnerships.

Accounts Receivable

LMS will need to make ongoing estimations on Lawrence Sports financial departments inability to collect accounts receivable and...