FIN 571 Week 3 Concept Review Video: Working Capital Management
Working capital reflects among the variances associated with present assets and present liabilities. It is crucial for business' operational necessities. The Lichmans purchase of Finagle a Bagel is an example of how individuals can be successful in self-employment business if they can manage their working capital appropriately. This week Team D was task with the assignment of discussing strategies the Lichmans used to manage their working capital.
Finagle Bagel is a retail seller of bagels. Sales tend to be cash and credit card, with credit card funds being available within 24 hours. As stated in the video, "obviously you are cash flow positive" which is great to business, a positive cash flow allows a business to pay expenses and debt in a timely manner.
Finagle Bagel does have wholesale customers. The video states that wholesale business is trickier. You will not get paid before you have spent cash as a customer may purchase a large quantity. Finagle Bagel does set terms for sales; if receivable accounts are not paid, Finagle Bagel use interest, administrative fees, and "things of that nature" to aid in collecting. Many of the companies that Finagle Bagel deals with will penalize for not responding to email in an appropriate timeframe, terms are frequently changed.
Working capital reflects among the variances associated with present assets and present liabilities. It is crucial for business' operational necessities. The Lichmans purchase of Finagle a Bagel is an example of how individuals can be successful in self-employment business if they can manage their working capital appropriately. This week Team D was task with the assignment of discussing strategies the Lichmans used to manage their working capital.
Finagle Bagel is a retail seller of bagels. Sales tend to be cash and credit card, with credit card funds being available within 24 hours. As stated in the video, "obviously you are cash flow positive" which is great to business, a positive cash flow allows a business to pay expenses and debt in a timely manner.
Finagle Bagel does have wholesale customers. The video states that wholesale business is trickier. You will not get paid before you have spent cash as a customer may purchase a large quantity. Finagle Bagel does set terms for sales; if receivable accounts are not paid, Finagle Bagel use interest, administrative fees, and "things of that nature" to aid in collecting. Many of the companies that Finagle Bagel deals with will penalize for not responding to email in an appropriate timeframe, terms are frequently changed.
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