Working Capital Management Concepts Worksheet
Shaquita Pruitt
University of Phoenix
Working Capital Management Concepts Worksheet
|Concept |Application of Concept in the Simulation |Reference to Concept in Reading |
|Describe the Company’s |Cash Inflow: Mayo is the principal customer for Lawrence Sports, |“Sales become account receivables |
|Cash conversion Cycle |contributing to about 95 percent of its sales. |before they become cash. Cash flow |
| | |comes from collection on accounts |
| |Cash Outflow: Lawrence Sports sources about 70 percent of its raw materials |receivables.” Breasley, Myers, & |
| |from Gartner Products. Murray specializes in semi-finished leather products.|Allen, 2005, p. 849 ) |
| |Lawrence Sports is the major customer for this $10 million revenue company, | |
| |contributing 75 percent revenue. Lawrence Sports also has operating |“There always seems to be many more |
| |expenses it incurs each period of $100,000. |uses for cash than sources. For |
| | |simplicity we have condensed the uses|
| | |into four categories: Payments on |
| | |accounts payable; Labor, |
| | |administrative,...