Mba550 Working Capital Management Simulation

Topics: Money, Standard & Poor's, Balance sheet Pages: 4 (731 words) Published: December 7, 2008
Working Capital Management Concepts Worksheet
Debbie Ballard
University of Phoenix

Working Capital Management Concepts Worksheet
|Concept |Application of Concept in the Simulation |Reference to Concept in Reading | |Inventory Management |Mayo the major principle customer for Lawrence Sports has defaulted on the |Inventory management is the second | | |loans payments for two weeks and unable to pay until two weeks later. This |important current asset in inventory.| | |will make up the deficit for Lawrence Sports goods for borrowed from the bank|Inventories may consist of raw | | |and deferred payments to Gartner by a week; the interest burden has gone up |materials, work in process, or | | |considerably |finished goods awaiting sale and | | | |shipment. Firms are not obliged to | | | |carry these inventories (Brealey, | | | |Myers and Allen, 2005, chapter 31, | | | |p.26). | |Collection Policy |Lawrence Sports goods present a set of term of sale as 20% collection and |The collection policy is the method | | |sales and balance of 80% due the following week. Credit will be use for some |of dealing with past-due accounts. | | |sales that involve with demand of cash on delivery (COD) and may be sensible |The first step is...
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