Working Capital Simulation Managing Growth

CitedBrigham, Eugene F. , and Phillip R. Daves. Intermediate Financial Management. 8th ed. Mason: Thomson South-Western, 2004.

The company was recently presented an opportunity by its largest retail customer to significantly increase its share in their private label manufacturing. The prospect of growth was risky, since it

Mirzayev, E. (2015, July 7).Target vs. Walmart: Who's winning the big box war? Retrieved from

Recently, however, competition has become stiffer and such large biotechnology firms as Genentech, Amgen, and even Bristol-Myers Squibb have begun to recognize the opportunities in SIVMED’s research lines. Because of this increasing competition, SIVMED’s founders and board of directors have concluded that the firm must apply state-of-the-art techniques in its managerial processes as well as in its technological processes. As a first step, the board directed the financial vice president, Gary Hayes, to develop an estimate for firm’s cost of capital and to use this number in capital budgeting decisions. Haves, in turn, directed SIVMED’s treasurer, Julie Owens, to have cost of capital estimate on his desk in one week. Owens has an accounting background, and her primary task since taking over as treasurer has been to deal with the banks. Thus, she is somewhat apprehensive about this new assignment, especially since one of the board members is a well-known Northwestern University finance professor.

Additionally, acquiring Atlantic Wellness as a client will help increase SNC’s sales significantly but will sacrifice portions of inventory and accounts receivable. Because of their current cash position SNC must keep a minimum of $3 on hand to meet their company’s operational needs therefore sacrificing portions of inventory and accounts receivable may not be a good idea. However, there is a positive for SNC. The risk of inventory and accounts receivable can be equalized by negotiating a profitable deal with merchant Ayurveda Natural.

SNC provides dietary supplements to individual customers and distributors. The company currently is only able to keep the minimum required cash on hand to run the business’ operations, and have had problems making payroll recently. The company and the nutraceuticals industry are

Baker, M. & Wurgler, J. 2002, ‘Market Timing and Capital Structure,’ Journal of Finance, vol. 57, pp 1-32

|the industry and its challenges it is important to understand its various phases of growth so far. |

The third phase is called the development phase. In the development phase, the engineers are focusing on the objectives.

arumugam, t.t. (2007) 'An analysis of discounted cash flow (DCF) approach', An analysis of discounted cash flow (DCF) approach, vol. 1, no. 57, Sep, p. 290.

In the year 1998, a research was conducted by Herbert J. Weinraub and Sue Vischer on the polices of a cross-section of ten different industries over ten years period. The results showed that industries do follow significantly different aggressive/conservative working capital policies, and they remain stable relative to each other over extended periods.

The rapid and unpredictive business changes make the business markets all over the world more competitive and exert competitive pressures on the firms. It is characterized by considerable amount of uncertainty regarding the demand, market price, and availability of raw materials. The markets in which real firms operate are not perfectly competitive. Hence this necessitates the firms to have working capital to meet the demand. Working capital management is important part in industries financial management decision. An optimal working capital management is expected to contribute positively to the creation of industry value. To reach optimal working capital management firm manager should control the tradeoff between profitability and liquidity

The life span of current assets depend on the time required in the activities of procurement , production , sales and collection and the degree of synchronisation among them .

Working capital management is important part in firm financial management decision. An optimal working capital management is expected to contribute positively to the creation of firm value. To reach optimal working capital management firm manager should control the trade off between profitability and liquidity accurately. The purpose of this study is to investigate the relationship between working capital management and firm profitability. Cash conversion cycle is used as measure of working capital management. This study is used panel data

The third chapter is allocated to discuss the methodology and conceptualization of the study in detail. That is research problem will be conceptualized based on the literature review. Hypotheses are formulated according to the conceptual model and literature review. Next operationlalization, data collection techniques and method of analyzing impact of working capital management on the profitability of trading firms.