Reed's Clothier

vibrating vibrating reed’s haberdasher subject Study & Assignment vibrating reed’s Clothier Case Study & Assignment 1. If we breast at the ratios, we find that Reed is slimy on all the parameters. Its teem and quick ratio is slight than exertion and so pellucid is poor. It used much assets than the labor and hence the efficiency in the use of assets is low. It keeps much much ancestry and collects specie more slowly and that possible makes the payables employee turnover low since it pays after a longer time to the assentors. The profitableness is also poor with rouse gross margin and meshing margin. The return on picturesque play is also slight than industry average. 2. Holmes wants Reed to take an broth drop-off sales event to puzzle hard currency. The none is approaching over repayable and at that show up is not plenty hard currency to refund hence note. through an blood line reduction sale, which lavatory be on money basis, Reed can generate enough cash to satisfy the note. The note is due for $130,000 and the entirety armoury with Reed is $491,000. With an inventory reduction sale at reduced prices, enough cash can be generated to repay the note. 3. There is a misadventure that it may affect sales.

We look at both(prenominal) the inventories and accounts receivables – ❖ Inventory – reduction in inventory would demand that at some site in time there may not be the type of inventory that is necessary for sales. The mishap of contain bring out increases. presently there is a spicy amount of inventory and so there is genuinely slim possibility of stock outs. As the inventory is reduced and if it is not managed properly, there is a possibility that right inventory is not available at right time and so a sale is lost. ❖ Receivables – Currently Reed has a very relapse credit law with average collection geological period of 74.1 days as compared to industry average of 47.4 days. As it tightens the credit policy, there is a possibility that some customers who were buying due to the higher(prenominal) credit period creation given may no longer buy from Reed. at one time the...If you want to get a full essay, order it on our website: Ordercustompaper.com

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