Week Three Learning Team Reflection: Working Capital Management Alan Litchman and Laura B. Trust, Co-Presidents of Finagle a Bagel, own a bagel business in Boston (Parrino, Kidwell, Bates, 2012). Alan and Laura met in business school and after gaining business experience in other industries they purchased the bagel business with the intent of growing it as much as possible. They have two primary target markets: 1) retail stores and 2) wholesale accounts with large institutions. In this paper, we will briefly discuss a few of the strategies they used to manage their working capital. The owners of Finagle a Bagel were tired of working for other people so they decided to buy one new business. They have used several financial concepts to manage the financial accountability of their small business. They have controlled costs from the beginning of the process to the delivery of the product, as well as the administrative costs. Other items that have been highlighted are the management of cash flow, payback, and the schedule of cash entries, which has allowed the company to pay its debts. They have established a good relationship with the banks in order to negotiate the time frame for payments and rate. Suppliers are also a key success factor for the company, as the payment terms are negotiated to match the flow cash. The company’s focus is to maintain its financial management so that the business may grow and return large profits. The Finagle a Bagel also has a policy of recognizing the hard work of their employees. The owners believe that managers and employees are responsible for the success of the company. Together, the company is growing in a sustainable and financially healthy way. According to Alan Litchman, when making any investment, first one has to understand what the demand for the new product is going to be, and what kind of product can be made with the new equipment (Parrino, Kidwell, bates, 2012). Alongside his wife, Mr. Litchman explained how important...
References: Investopedia. (2014). Cheap Money. Retrieved from http://www.investopedia.com/terms/c/cheap-money.asp
Parrino, R., Kidwell, D., Bates, T. (2012) Fundamentals of Corporate Finance, (2nd Ed) John Wiley & Sons Inc.
Please join StudyMode to read the full document