Lawrence Sports Simulation

Lawrence Sports Simulation
In today's business environment, it is imperative that organizations hold fast to the basics of business strategy, which is to continually increase profit for the company and revenue for the stakeholders. In order to be successful in strategizing, each organization must ensure that their working capital is optimized and cash flow is liquidized. Working Capital involves making appropriate investments in cash, marketable securities, receivables, and inventories, as well as the level and mix of short-term financing (Emery, Finnerty, & Stowe, 2007, p. 639).
Lawrence Sports is a manufacturer and distributor of sporting good equipment and protective gear for a wide variety of sports. They are a 20 million dollar revenue grossing corporation but are currently facing a number of working capital and cash flow management issues. After carefully analyzing and identifying Lawrence Sport's current issues with their working capital and cash flow management, we will be able to provide a suitable recommendation; one that should improve their ability to liquidize, creating sustainable growth and optimize their working capital.
Problem Statement
Lawrence Sports is currently enduring a cash positioning problem due to an uncontrollable credit policy. Liquidity also continues to be a challenge due to the current credit policy in place. Lawrence Sports lacks the necessary capital management structure to deal with uncertain future cash flows. The delay of payment from their one of their major customers may end up leaving Lawrence Sports without a vendor and no control of their future supplier payment.

Lawrence Sports has a number of issues that also need to be addressed. The most outstanding issue they face is the fact that Mayo, a retailer responsible for approximately 95 percent of their sales, is defaulting on their payments forcing Lawrence to delay on paying their suppliers. The next most important issue is the current credit policies in place...