Learning Team Reflection Essay

Owners and autobuss in the phone line bespeak to make works bang-up counsel decisions such as document management, change-flow management, accounts receivables, and supplier or vendor craftiness credits to ensure the political lineamenty has sufficient cash-flows to stick step to the fore short obligations. There are a hardly a(prenominal) different working bully strategies a trading can employ. conciliative current asset management involves holding large cash balances and inventory. The regulatory current asset management strategy requires companies to keep current assets low. superintend a bagel is a young, growing business that applies the working roof trade-off strategy to manage their working capital (Parrino, Kidwell, & Bates, 2012). Married entrepreneurs purchased the business when it was a few years old and had four to five stores (University of Phoenix, 2014). The owners encountered umteen of the same issues commonly associated with running a young busin ess. They had to learn to cut with customers, vendors, and suppliers however, the larger issue was discovering how to manage their working capital.Maintaining and continually producing working capital is imperative for any business. Effective working capital management ensures the political party has large money to pay the bills. Managing their current assets, inventory, and liabilities are all part of working capital management (Parrino, Kidwell, & Bates, 2012). Finagle a Bagel owners concentrate on mapping out their future and ensuring the business would grow enough to produce a successful cash flow. A successful cash flow, and keen understanding of their banking relationship, will allow the companies to more comfort when winning on debt or liabilities. The strategies Finagle a Bagel use for managing working capital are no different from the plan many companies utilize. The owners set up a good rapport with their bank, vendors, and suppliers (University of Phoenix, 2014) whi ch enables them to create the opportunity for positive engross rates andtrade-offs.The good interest rates assist in the short-term and long-term when they need to acquire a line of credit to pay suppliers or to expand the business. The working capital trade-off strategy requires the manager to balance shortage costs against carrying costs (Parrino, Kidwell, & Bates, 2012). The business must be flexible. To allow for more time to pay another business back, trade credit is a strategy businesses extend to one another. Businesses work out a type of credit line to provide the other business with a suitable amount of time to pay their bill (Parrino, Kidwell, & Bates, 2012). reliance lines are ideal and prevent banks from getting involved. Finagle a Bagel uses the strategy of trade credit regularly. Improper working capital management may jeopardize a company to default or bankruptcy. Upon reviewing the working capital management video, it is inevitable that the owners and managers in a business should supervise cash inflows and outflows periodically by computing financial ratios such as efficiency ratios inventory turnover, and account receivable turnover and working capital ratio to ensure that the company has adequate cash-flows all the time.ReferencesParrino, R., Kidwell, D. S, & Bates, T. W. (2012). Fundamentals of incorporated Finance (2nd ed). Hoboken, NJ Wiley. University of Phoenix. (2014). Week 3 Electronic Reserve Videos. Retrieved from University of Phoenix, fit/571 Foundations of Finance course website.