Business Finance Essay

338 WordsMay 18, 20132 Pages
An area of great focus in recent years due to the economic down turn has been just-in-time inventory systems. This allows organizations to keep only enough products on had to fill immediate orders and to manage human resources (Benjamin, Perry, 2003). This approach incorporates more part-time staff and temp workers to meet the demands as need and allows the organization to scale back and safe money when there is low or no demand for their products. Barbara identifies a great area of focus to evaluate old inventory and only maintain adequate product levels as needed as well as incorporating the leasing of property and equipment to increase cash flow. Along with this approach the organization might want to look at inventory financing in which banks lend on the security of inventory (Brealey, Myers, and Marcus, 2011 p. 547). If the origination has a surplus of inventory that can be easily identified and sold if they default this would be one way to increase cash flow as they move to a just-in-time approach. The second area of focus that is brought to light in this diversified approach is the restructuring of accounts receivable. Barbara incorporated accounts receivable in her action plan due to the large impact it could have on cash flow. If they offer early pay off incentives and penalties for those that do not pay them off in a desired amount of time this will allow them to increase cash flows real time as they work to sustain the organization. Overall Barbara has put together a well thought out diversified plan that will help to increase cash flow and not lock the organization into only one approach in the event one does not produce a positive return on cash flow. Ecclesiastes 11:2 “give a portion to seven, and also to eight; for thou knowest not what evial shall be upon earth”. We should always incorporate options into our action plans in the event

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