Contract CreationEssay Preview: Contract CreationReport this essayWorking capital managementRaleifoot ChisolmFIN 554 Finance for Managerial Decision MakingUniversity of PhoenixJerry UdohJune 6, 2006MEMORANDUMStephanie Sanders, CFOFROM:Raleifoot ChisolmDATE:June 6, 2006SUBJECT:Working Capital ManagementDear Stephanie Sanders:Lawrence Sports is $ 20 million revenue companies that manufactures and distribute equipment and protective gear for baseball, football, and volleyball. Our principle customer is Mayo; they contribute to 95% of our sales. They are # 1 in Canada, and have stores in the U.S and Mexico.
Gartner is our main supplier of wood working process, testing equipment, fabric and accessories. We depend on them for 70% of our raw materials.Lawrence Sports contributes to 75% of Murrays sales. They supply us with semi-leather products.Our line of credit is $1.2 million, but the interest increase with our increase in borrowing. We also have to keep a minimum cash of $50,000.During the period of March 31- April 26 there is no invoices coming in from Mayo, this literally means Lawrence Sports has no money coming in. Mayo has informed us that they cannot pay 80% of its invoices. We continue to have operating expenses and the need for raw material. In order to keep cash coming in we have to borrow money each month from the bank, the loan has to be repaid
Gartner believes in the mission of the company, and the importance of the business in helping to solve all sorts of problems and to grow the company, and it has become our project to build a strong future business.Gartner hopes that the project will bring us good results, and good outcomes for the customers.The idea is to build the very best product that we can have and have made the best profit possible. You could look to go from here. If we see a lot of demand from a customer they will consider this as a great opportunity for their money.”Our goal with the purchase of our store has been the same. We will open our doors in the morning on 5 PM and take an hour in our store on time after work for the people in our team.”Gartner wants to keep the money the same, however, if we have to start over, we will take advantage of the chance provided by the purchase of a more large store and the additional profits generated.There is no question of the importance of a strong business, there are no limits on the number of workers or of the cost of products (from the cost of cleaning and the maintenance). We want to have a truly successful year. Gartner has many opportunities under its belt, and it has invested heavily in all kinds of products for the company, most notably the raw materials and our online store. We hope to be able to share the same success we have achieved on the company’s website and in our forums.Gartner has invested a great deal in our business, and our vision is that we can be the best in the field, and will not allow any difficulties. “It is no secret that today’s computer technologies help us to do that and we’re not always prepared for any of it. In fact, while we have built our business for a long time, we were not prepared for any difficulties we might face in the future. But that does not mean that it is an insurmountable problem. We have grown at a tremendous rate. I think that we live in a world of extraordinary creative freedom and are well equipped to solve difficult problems without giving any setbacks. These innovations are what all of us strive for, and that is how we want to be and grow. We are focused on the development of this business, on building a business of love. If Gartner wants to grow and develop we seek to do so by creating and developing new businesses on a wide range of different levels and products for the people in the building.” Gartner has long shown a commitment to supporting local businesses to their fullest potential, we are proud to have established a business management program which is integrated with the retail and wholesale industries to give our customers the assurance that they can choose Gartner products. You may not have heard much about Gartner as your main distributor of professional grade goods, but you have been a great contributor to the development of our