...Lawrence Sports: Determination of Working Capital Policy University of Phoenix: Corporate Finance FIN/571 January 27, 2013 Course Facilitator: Troy Mahone Lawrence Sports is a multi-million dollar company that prides itself on its ability to manufacture and distribute quality sports equipment and protective gear. Their principal Customer, Mayo Corporation, has recently requested a repayment extension on their loan with the company. Mayo would like to pay 80% of the payments due for the weeks of March 17-23 and March 24-30 and no payments would be made prior to April 14-20. To allow this payment arrangement, Lawrence Sports would have a deficit cash position for the weeks of March 31-April 6, where they would have to take an additional loan to cover the $307,000 deficit. Additionally, they would incur an interest payment of $3,150 on the loan. For the week of April 7-13, a loan would have to be made to cover the $411,000 deficit with an additional interest payment of $3,690. Lawrence Corporation has already reached their $1.2 million credit limit level and they would, according to company policy, be unable to make additional loans. Lawrence Corporation greatly values the business relationship with Mayo Corp, and a decision must be made determining whether to allow a repayment extension based on the terms Mayo has stated, or come up with an acceptable plan, not only for Mayo Corp, but a plan that would be agreeable with all the parties involved. Allowing any extension...
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...Lawrence Sports can implement an aggressive approach as an alternative working capital policy. This policy uses less long term and more short-term financing (Emery, Finnerty & Stowe, 2007). Short -term financing is more cost efficient with comparison to the long term financing. Lawrence Sports would experience a profit increase under this policy. This approach has high risk and often high return, as we know from the principle of Risk-Return Trade-Off that without some sort of market imperfection, higher expected profitability comes only at the expense of greater risk (Emery, Finnerty & Stowe, 2007). The main idea is to collect payments on time, leaving no debtors, invest that amount in the business and pay the creditors as late as possible. With that said, a short term aggressive approach is ideal only if the firm expects decline in interest rates. There are risks associated with this aggressive financing approach include higher interest rates, the potential for accounts receivable default, and credit limitations. Therefore, Lawrence Sports have to be prepared to take different actions that are needed in times of tight periods in the capital cash flow. The company can negotiate with current creditors to stretch the account payable, also, to identify and create a list of potential creditors that would be executed in the event there are issues with the existing creditor relationship. Lawrence Sports’ finance manager should also identify and create a similar list with relevant...
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...head: PROBLEM SOLUTION: LAWRENCE SPORTS INC. Problem Solution: Lawrence Sports Inc. Veronica S. George University of Phoenix/MBA550 Problem Solution: Lawrence Sports Inc. Lawrence Sports generates $20 million in yearly revenue by manufacturing and distributing sporting goods protective gear for team sports. The main issue with Lawrence is that they depend solely on world leading retailer Mayo for the bulk of their revenue and only have two sources for their materials. The problem begins when Mayo Stores decides not to pay on time leading to major cash flow problems downstream. This paper will look at Lawrence’s financial problem and create a working capital policy that will address their cash management needs for the long-term. Situation Analysis Issue and Opportunity Identification Lawrence Sports’ principle customer, Mayo Stores, is having a difficult time paying for the products on time. The current payment arrangement is that Mayo will pay 20% on purchases and 80% the following week. Mayo depends principally on this revenue from Mayo and it finds itself not being able to live up to the agreements made to their agreements to both creditors and suppliers. The only viable option detailed in the scenario is borrowing from Central Bank. Their plan is to borrow a daily loan for any amount to keep the account minimum of $50,000. Lawrence has reached the maximum...
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...Lawrence Sports Simulation Working capital management and the capital conversion cycle are keys to success in companies. According to Emery, Finnerty & Stowe (2007), this term is defined as “the management of working capital management of assets and liabilities.” Having an excellent working capital management policy can help the company to be more effective in improving profits and reducing risk most commonly associated with capital investment. Lawrence Sports is a manufacturer and distributor of sports equipment. Following will include an analysis of the issues this corporation is currently facing. A list of recommendations to the company along with an analysis of the cash conversion cycle, the working capital management policies and cash management techniques to reduce the risk associated with capital investment, trade of products in other countries and currency exchange impact will be evaluated. Dependency Reduction Recommendation The Lawrence Sport simulation does emphasize the importance of all the business partners to the cash conversation cycle of the organization. For that reason, keeping a strong business bond between all partners is very much in need. Lawrence Sports has been having issues with cash flow because of late payments from vendors and sometimes a result of no payments. Lawrence Sports should work on improving its cash flow by establishing a system of regularity which can be done by adding competition on both sides of the transaction- the sales as well...
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...Lawrence Sports Simulation FIN/571 Corporate Finance Prof. Ricardo Rivera Matos May 29, 2012 University of Phoenix * Lawrence Sports Simulation * The process of taking risks will define if a company will emerge from a financial situation. The business relationships will suffer, but if the high risk is in a short term basis, probably this will help both parts to comprehend why is important to keep good finance health when an emergency situation occurs. * Lawrence Sports is a 20 million revenue company that manufactures and distributes equipment and preventive gear for baseball, football, basketball, and volleyball. Mayo Stores is the principal customer of Lawrence Sport. Mayo also is the world leading retailer, with 3,000 stores with operations in United States, Canada, South America, and Europe. Lawrence sources all its materials from Gartner Products and Murray Leather Works. * Robert Dent is the Key Account Manager of Mayo Stores. He has shown an impressive track record in building and excellent and profitable relationship with Mayo. Ann-Wu Head is the head of vendor relationship. She feels that Lawrence Sports’ bargaining power with Gartner is restricted since Lawrence Sports is not a major customer for Gartner. She finds Murray the more flexible of the two vendors and she is looking for more vendors like them. She feels that Murray is likely to run deep financial troubles if Lawrence Sports stretches payment beyond a limit. * As managers we...
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...Introduction Guillermo Furniture Store is a furniture manufacturer in Sonora, Mexico who faces competition who are putting a dent in his business with more modern equipment lowering production costs hurting his profit margins and lowering prices. The principles of finance describe typical behavior in financial transactions and provide guidance for decision making. Financial Self Interest guides rational decision making Guillermo has to make decisions based on the fact money is not everything. There is a balance of work and life. He has chosen not to acquire any companies since it would take time away from his family. Many financial decisions must consider the time value of money The furniture store has to consider that a dollar today is worth more than a dollar tomorrow. The time value of money derives from the opportunity to earn interest on it. Simply stated, the time value of money is how much it costs to “rent” money. Emery Finnerty Stowe All Transactions have at least two sides, with each party considering their self interest Most transactions are Zero-Sum where one party gains only at the other party’s expense. In this case Guillermo must negotiate the terms and conditions that are favorable to the growth of his furniture business if he goes into partnerships with competitors or foreign distributors. Incremental costs and benefits are the basis for choices among alternatives. Guillermo must weigh the cons and pros of staying current, going high tech or becoming...
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...Running head: PROBLEM SOLUTION: LAWRENCE SPORTS INC. Problem Solution: Lawrence Sports Inc. University of Phoenix Problem Solution: Lawrence Sports Inc. Presently Lawrence Sports has had to make some short-term decisions concerning its working capital management. In order to learn from this experience they will develop a working capital policy which will increase the predictability and efficiency of their cash. Working capital is defined as “the assets of a business that can be applied to the operations” or “the amount of current assets which exceed the current liabilities” (Answers, 2007, para. 1). Working capital management involves the “deployment of current assets and current liabilities as to maximize short-term liquidity” (The Free Dictionary, 2007, para. 1). The intent of a working capital management policy is to ensure an organization is able to continue business operations and has adequate ability to satisfy both short-term debt and upcoming operational expenses. Simply stated, “good management of working capital will generate cash, improve profits and reduce risks” (Anonymous, 2007, para. 2). Lawrence Sports, a manufacturer and distributor of sporting goods equipment, is currently facing a number working capital and cash flow management issues largely related to past due payment of their largest customer, Mayo Stores. This paper will take a closer look at Lawrence Sports’ simulation and identify the issues, goals, potential solutions, evaluate...
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...Freud Psychosexual Development In Freudian psychology, psychosexual development is a central element of the psychoanalytic sexual drive theory, that human beings, from birth, possess an instinctual libido (sexual energy) that develops in five stages. Each stage – the oral, the anal, thephallic, the latent, and the genital – is characterized by the erogenous zone that is the source of the libidinal drive. Sigmund Freud proposed that if the child experienced sexual frustration in relation to any psychosexual developmental stage, he or she would experience anxiety that would persist into adulthood as a neurosis, a functional mental disorder. Stages of Development Stage | Age Range | Erogenous zone | Consequences of psychologic fixation | Oral | Birth–1 year | Mouth | Orally aggressive: chewing gum and the ends of pencils, etc. Orally Passive: smoking, eating, kissing, oral sexual practices[4] Oral stage fixation might result in a passive, gullible, immature, manipulativepersonality. | Anal | 1–3 years | Bowel and bladderelimination | Anal retentive: Obsessively organized, or excessively neat Anal expulsive: reckless, careless, defiant, disorganized, coprophiliac | Phallic | 3–6 years | Genitalia | Oedipus complex (in boys and girls); according to Sigmund Freud.Electra complex (in girls); according to Carl Jung. | Latency | 6–puberty | Dormant sexual feelings | Sexual unfulfillment if fixation occurs in this stage. | Genital | Puberty–death | Sexual interests mature...
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...Whenever we look at a playground, we supposed to see some children play happily with their peers and some are not. Have you ever wonder what make their behavior are so different? Life span development studies of how people grow and change during all phase of their lives. In the book I Know Why The Caged Bird Sings written by Maya Angelou proves that development is multidimensional including biological, cognitive and socioemotional. Maya is three years old and her brother, Bailey, is four experienced broken family and were sent to Stamps, Arkansas with pieces of paper attached on their bodies “to whom may it concern”. They live with their paternal grandmother, Annie Henderson, whom soon they called Momma. Maya and Bailey who was born and grew up were abandoned without the love, care and nourishment in a good environment with their biological parents have had many struggles to face during childhood to early adolescence and affect their entire life. As the beginning of the book, Maya was unable to finish her poem “What are you looking at me for? I didn’t come to stay…” According to Erikson, Maya must be in initiative versus guilt stage because Maya feels that she is awkward and ugly with kinky hair and dark skin. She dreams to be a beautiful white child with the straight blonde hair and blue eyes, not because she didn’t like herself, but because was taught not to like her Blackness. The social norms with stenotype expectation influences Maya’s development and personality when...
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...Ever wonder why children behave the way they do? According to theorist Jean Piaget there are some very simple explanations for this. Piaget explains through his theory of cognitive development, to what is occurring for a child at every stage of their live and how it gradually changes. The first stage of Piaget’s cognitive development is the sensorimotor stage. The sensorimotor stage is comprised of six sub-stages which begin at birth and are broken down specifically to age ranges of when development markers should occur up to two years of age. Piaget argues that an infant processes thought from sensory experiences with physical actions to gain an understanding of the world around them without judgment. Piaget argues that infants do not distinguish between the world and themselves meaning that objects have no permanency. For example, a toy given to a six month old, as long as it is in sight it exsists, but when distractions blocks the view of the toy, the child does not search for it because for them it is no longer there. Piaget’s theory is that infant should learn object permanence as they near the end of the sensorimotor stage (Santrock, 2010). In the preoperational stage Piaget contests that children with in the age range of two to seven years are beginning to think in a more egocentric kind of way. They are discovering themselves and the world around them. The children are unaware of differences in people and familiar objects. The child is oblivious to the fact...
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...* ------------------------------------------------- 6. The 3 main types of prenatal development are the zygote, embryo, and fetus. The zygote is the fertilized egg in the womb; it lasts for 2 weeks and begins when the sperm first fertilizes the egg. Soon afterwards, the zygote becomes an embryo. During the embryo stage, the actual human organism is mad and this lasts from the 2nd week to the 2nd month. During the fetus stage, the organism is in its developmental stage. This begins after 9 weeks of pregnancy. A teratogen is an agent that can cause harm to the womb ex. If a pregnant woman is drinking a lot of alcohol, she can harm the fetus because alcohol is a teratogen and she could potentially cause fetal alcohol syndrome. 7. The brain capacity of newborn babies is a lot smaller than that of an older person. That’s why we don’t remember most of our infancy. Once we are born we start to make a neural network that allows us to complete basic functions, like talk, remember, etc. The habituation for the infant cognition is a very simple way of learning. When the babies are exposed to something multiple times, they lose fascination in it. 8. Piaget developed 4 stages of cognitive development that show how humans develop mentally. Stage 1 is the sensorimotor stage. This is the stage that occurs from 0 to 2 years and this is when we start to interact with our senses. The 2nd stage, Preoperational, 2-7 years old, is when language begins but isn’t completely understood and is...
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...Child Growth and Development Home and Family Life June 10, 2009 Growth and Development For every human being, the process of growth and development begins at birth and continues until we die. Growth is defined as the process of increasing in physical size, while development is the process of maturation and the refinement of body systems, thought processes and judgment. Child development unfolds in a complex manner as he or she interacts with the surrounding environment. Although some children may grow and develop a little earlier or later than others, they tend to follow a general pattern of progression. A child's development can be followed by how they play, learn, speak, and behave. The tasks and skills the child learns during the different stages of development are referred to as developmental milestones. Milestones develop in a sequential fashion. This means that a child will need to develop one set of skills before he or she can develop new skills. For example, children must first learn to crawl and to pull up to a standing position before they are able to walk. Each milestone that a child acquires builds on the last milestone developed. I had the opportunity to observe a two year old female child at Home and Family life. The child at this age is growing at a rapid pace and usually gains approximately 8 oz or more per month. The child I observed was able to demonstrate some fine motor skills such as stacking blocks on top of each other and then knocking them down...
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...decisions that we make and what processes do we go through in making those decisions? Are the decisions that we make simply intuitions of right from wrong or are they governed by outside factors that dictate our decision making abilities? All of these questions are questions that many dynamic psychologists have tried to answer and define throughout the years. More notably are Jean Piaget and Lawrence Kohlberg, who both addressed the concerns of moral development in the individual, but in differing ways. Piaget, who was best known for his work in how we learn throughout our development, gave Kohlberg a foundation to establish his focused study of how the moral fibers of an individual are created and developed throughout the lifespan (Kretchmar, 2015). Both found that each individual will establish a code of moral ethics throughout their lifespan, but the "why's" of those ethical decisions are often something that are hard to determine. Kohlberg set out to define the moral development of the individual through his studies of human dilemmas. The theory of moral development, formalized by Lawrence Kohlberg is one of significance in study of the lifespan, as it addresses our ability to distinguish right from wrong. The theory also questions if morality was a result of one's true emotional stance or one's expected rationale based on societal rules. With the moral development theory, Kohlberg established with our growth , our ideas of right and wrong change based on the cognitive level...
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...TEACHING FUNDAMENTAL MORAL PRINCIPLES TO Page 2 STUDENTS AT DIFFERENT AGE GROUPS Introduction Educational psychology is a branch of psychology concerned with developing effective educational techniques and dealing with psychological problems in schools. It’s a study of methods of training, teaching and their effectiveness. Also, the problems experienced in learning formal material; in particular, the study of how to help people, especial school children, with their learning problems to overcome their difficulties. (Definition) Fundamental moral principles are the principles of right and wrong that are accepted by an individual or a social group. (Definition) Moral education is an increasingly popular topic in the fields of psychology and education. It’s been constantly debated in our daily lives. For instance, increased suicide cases, juvenile crimes such as: drug abuse, gang fights, theft and also teen pregnancy and inclining abortion rates have caused many to question the morals of the upcoming generation. This is not only faced in Singapore, but many other nations are also facing serious moral issues with the children these days. Therefore, for today’s programme, I will be focusing on different age groups; children between the age 3 and 5, Primary 5 students (10-11 years old) and High School Seniors/Junior College students (16-17 years old), and teach these students about right or wrong of fundamental moral principles. To learn about cognitive...
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...Article Review Oracle vs. Google Steven Phillips University of Phoenix LAW/421 Mark Rorem June 16, 2014 Article Review: Oracle vs. Google ARTICLE SYNOPSIS Oracle vs. Google is an infringement suit against Google for copyright infringement of Oracle’s Java platform. Due to a convoluted decision by the jury Google may escape the $1 billion suite Oracle is seeking for Google using Java API code. The Jury found that Google did “infringe on the structure of Oracle’s Java copyrights but not the platform in total” and only consisted of 9 lines of code (Oswald 2012). The jury could not agree if Googles use could be considered “fair use”. Googles lawyers see the indecision as grounds for a mistrial calling infringement and fair use are two sides of the same coin (Oswald 2012). LEGAL ISSUE The legal business issues raised in the article is the infringement of Oracle’s Java platform by Google. Google used Java code in the development of its Android mobile operating system. Copyright laws allows for the placement of ownership of creative, but not functional works. According to Oswald, API’s are much more functional than creative being a necessary bit to make software work (2012). MANAGERIAL PERSPECTIVE The legal issues covered by the article covers copyrights and what can be protected using a copyright. As explained by Melvin (2011), certain works cannot be protected such as ideas, procedures, systems, processes and methods of operation. The direction the case is currently...
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