Present additional idea for short-term financial

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Reference no: EM133600717

As a previous sales manager of a department store, I witnessed periods in which short-term financial needs had to be adjusted or increased. Specifically, retail locations must prepare for increased business during the holiday season. Asset requirements change over time due to seasonal factors (Moy 2014). During the seasonal period (October-January), retail companies must make significant financial adjustments. These adjustments include an increase in inventory, payroll, etc.

During these periods, the organization should have high amounts of working capital. Because business demands increase, flexible, restrictive, or compromising policies are necessary to ensure that required total assets are available. To improve its cash position to address financial needs, organizations have multiple options. A few options for improving short-term financial needs include managing inventory, alternate funding, and negotiating discounts (Bartram 2013). Managing inventory effectively includes taking into account what is in stock and updating inventory every time an item is sold, damaged, or stolen. This method allows the business to know what is on hand and what needs to be ordered. Also, knowing which items are in high demand is essential to meet customer demand. Either line of credit or loans can provide alternate funding. Negotiating discounts may lessen the financial strain. "Firms can benefit from discounts through early payment, bulk supply or regular orders" (Bartram 2013).

Business demands fluctuate quite often. It is essential to be prepared. Having the required working capital, funding, and inventory is critical. There are specific periods in which financial needs may increase, and making the necessary adjustments aids in the organization's success.

QUESTIONS:

1. Present an additional idea for a short-term financial need your colleague's organization might have.

2. Provide an additional perspective on whether your colleague's selected organization should have low, moderate, or high amounts of working capital, or an additional perspective on your colleague's rationale.

3. Offer an additional suggestion for how your colleague's selected organization could improve its cash position to address its short-term financial needs.

Reference no: EM133600717

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