Working Capital Alternative

The purpose of working capital management is to assist companies in making realistic or sound financial decisions that volition enable to: a. soak up the ability to have enough funds on hand/liquidity if needed. The confederacy post go about doing this by investing in current assets so that if need be it will be able to have something to fall back on by liquidating those assets. This green goddess be useful in the case of unexpected issues such as unforeseen demands. b. deciding what trump out way to invest its immediate payment and gain the largest amount of profit possible. This can be through by investing the companys financial resources into other avenues (i.e. stocks) quite an than just investing them in the companys current assets. Lawrence Sports can manage its capital by using different approaches which ar the Conservative approach, the Aggressive approach, and the Maturity-matching approach. The conservative approach is used for companies non wishing to take too much risk with their finances. In following the conservative approach, Lawrence Sports will invest most of its financial backing in current assets, thereby allowing the company to have golosh cash in case it needs it. By winning a look at the companys finances, I can see that it often falls short on cash.

Therefore, the company should definitely use the conservative approach as a backup for unforeseen circumstances so that it may be able to liquidate its assets to use as source of cash until the company can gain more financial stability. Therefore, this is the best approach for the company at this time. The aggressive approach would request that the company invest its current cash into more wondering(a) outside investments, such as stocks, rather than investing them in current assets. It also allows the company to have a high percentage of operating profitability. Lawrence Sports cannot afford to take too many an(prenominal) risks with its finances at this time. The maturity-matching approach is exactly what it says. Using this approach, Lawrence Sports... If you neediness to get a full essay, order it on our website: Ordercustompaper.com

Ordercustompaper.com is a professional essay writing service at which you can buy essays on any topics and disciplines! All custom essays are written by professional writers!