Starbucks has been able to hold onto their business making revenue in these current rough economic times. Even though they have had to shut down some stores it is nothing new than what any other company does when stores are not brining in the revenue that is expected to cover expenses of the business. To see what kind of impact the decisions that Starbucks has made and to see if they have helped the company at all, there will be several financial statements that will be looked over as well as policies to determine if Starbucks is doing good with their financials.
Background information Working capital refers to the funds that are used to meet short-term responsibilities or the funds used to carry out the day-to-day activities of an organization. The management of these resources is equivalently important as the management of the long term finance funds.
The management of the working capital is fundamental in making sure that the operations of the organization are smooth. In every business, working capital is an important and critical part of an investment because it is impossible for an organization to run without these funds.
Organizations requires adequate raw materials, finances to pay for labor, funds to create a stock to meet the demands of the consumers and the ability to provide goods on credit for its customers. All these are financed by working capital. Businesses are unable to operate without adequate working capital.
This necessitates the research on the management of these funds in an organization.
Working capital has been an area of interest to many researchers, particularly because of the effect of the funds on the operations of an organization.
During the times of recession organizations seek strategies that can be helpful in the improving the chances survival of the organization. External market factors play a role in the organization operations and the organization has minimal or no control of these factors.
This makes it important and critical to manage the working capital to facilitate and allow the organization to survive and increase their performance in these conditions. This is particularly important in large organizations where the management of working capital prevents liquidity problems and improves the capacity of the organization to manage in severe financial problems or any other unexpected change Padachi, Working capital is important because it allows the organization to maintain a production schedule and maintain sales, which are the major concerns of an organization.
The lack of a proper working capital interrupts the production process andincapacitates the organization, which may lead to the foreclosure of the business. Poor management of the working capital impairs the operations of an organization and affects the profitability and the survival of the organization.
This necessitates the research on proper mechanisms to manage these funds to ensure that the management of the organization pays the issue enough emphasis.
Working capital is important in maintaining sound profitability and liquidity levels. The current economy has made an increase the cost of capital and subsequently, this has necessitated more emphasis to be placed on working capital management.
Increase in the working capital allows the organization to run with minimal external funding. This use of working capital in the day-to-day operations is efficient and affordable as compared to external funding.
The management main role is to ensure that a business is profitable and is in a capacity to meet its obligations. This makes the study and research on working capital management important to facilitate the achievement of the goals. Investors play a vital part in financing the operations of an organization.
The rate at which investors find an organization or investment to be attractive is determined by the risk and the profitability of the organization. The working capital is major determinant of the risk of an organization or an investment.
An increase in the working capital of an organization indicates that investing in the organization is not risky because the organization has a greater chance of survival as compared to a similar investing operating on a lower working capital.
The working capital of an organization is also a major determinant of the profitability of the organization Boisjoly, Consequently, the determination of strategies to manage the working capital effectively is very important to ensure that the organization attracts investors by increasing its profitability and reducing its risk.
According to Boisjolyworking capital management refers to the ability of the management of an organization to manage the short-term capital available to operate the day-to-day activities effectively.Working Capital Strategies Paper FIN/ April 20, Professor Tara Batemon Week 4: Working Capital Strategies Paper - Wal-Mart Team B will analyze Walmart’s financial reports, such as balance sheets, statements of cash flow, management comments, and footnotes to financial statements, in order to clarify how each current asset and liability account has affected cash management strategies.
The working capital of an organization is also a major determinant of the profitability of the organization (Boisjoly,) Consequently, the determination of strategies to manage the working capital effectively is very important to ensure that the organization attracts investors by .
Starbucks Working Capital Strategies Starbucks is one of the largest most recognizable names in the coffee industry known worldwide. Starbucks has been able to hold onto their business making revenue in these current rough economic times. Working Capital Strategies Essay Sample Working capital measures the availability of liquid assets that are needed to run the day to day activities.
Proper management of this working capital is a key element to business success and a number one way to prevent business failure.
Working Capital Strategies for Microsoft Essay Words | 5 Pages. Working Capital Strategies By Forecasted If Microsoft forecasted revenue increase by 20 percent’s for the upcoming year, several parts of the annual report will be .
Working Capital Management In order to fully understand the company¡¦s financial position a financial manager must consider the amount of net working capital available.
The net working capital is the difference between current assets and current liabilities.