Management of Working Capital Case Study: “George’s Trains” Based on the video, George is running a very profitable business. Yet, George is conscious and knows that one is in a MBA Managerial Finance class. George feels that one is able to address and give contributable guidance on his working capital practices. George approaches you with a few questions related on how to advance on his working capital practices. For example, what are the potential dangers in Capital Budging practices, what are working capital practices, including his methods of capital budging and analysis techniques, and lastly, what are some areas of improvement would one recommend?
George’s trains is one of the leading and seasoned establishment when it comes to model trains. George’s train’s offers model trains and in addition to one of the only few shops that offers an …show more content…
The methods that George used for his capital practices was to primarily ensure that he consistently had items in stock yet, George did not order too many items. Based on how George ran his business, he was able to gain the trust from the bank for which allowed him to ensure that his business kept running. George made smart decisions by moving items out that were not trending. According to Danielson & Scott (2006), “Capital budgeting theory typically assumes that the primary goal of a firm’s shareholders is to maximize firm value” (p. 2). In addition, he was able to keep his business up and running due to how well he budgeted.
George methodology towards overstocking shelves helped him in the long run. For example, due to the business he was not required to keep track of his busy times. Therefore, his shelves were stocked and ready for his customers. Like most capital practices, there is a time that the business will see a pitfall. Based on George’s capital practices, one would state that his pitfall mainly lie in the amount of products that are
George’s trains is one of the leading and seasoned establishment when it comes to model trains. George’s train’s offers model trains and in addition to one of the only few shops that offers an …show more content…
The methods that George used for his capital practices was to primarily ensure that he consistently had items in stock yet, George did not order too many items. Based on how George ran his business, he was able to gain the trust from the bank for which allowed him to ensure that his business kept running. George made smart decisions by moving items out that were not trending. According to Danielson & Scott (2006), “Capital budgeting theory typically assumes that the primary goal of a firm’s shareholders is to maximize firm value” (p. 2). In addition, he was able to keep his business up and running due to how well he budgeted.
George methodology towards overstocking shelves helped him in the long run. For example, due to the business he was not required to keep track of his busy times. Therefore, his shelves were stocked and ready for his customers. Like most capital practices, there is a time that the business will see a pitfall. Based on George’s capital practices, one would state that his pitfall mainly lie in the amount of products that are