Reed’S Clothier Case Study And Questions

vibrating reed’s haberdasher Case Study and Questions Amanda Smith University of Phoenix correspond 415 – Finance For Business Instructor Thom Rindahl October 11, 2009 vibrating reed’s Clothier reed instrument’s Clothier specializing in custody’s clothing, is in the mitts of a financial crises. When Jim reed’s Son took over the store, he increased the retail quadriceps and turned the 3rd let aback of their building into a larger space to fellowship enumeration. Jim reed instrument II easily locomoteed change magnitude the amount of list in the store with the judgement that many sales where deep in thought(p) cod to the lack of items. However, the more(prenominal) inventories Jim purchases the more he had to start paying out to his suppliers. The stores sales had doubled in the defy 10 years, but inventory has tripled over the same rate of flow of time. With the increase in purchases and the c be and principal salarys on the owe had disadvantageously eroded Reed’s positive run into run away in the past three years. Reed normally met his cash crunches by acquittance to the bank to ask for an increase in his relate line. However, Reed’s accounts are now to the highest degree 40 days past due, and the suppliers were demanding requitals with the bruise of ceasing deliveries until payment was made.

This threat had pushed Jim into going to see his banker with the idea of increasing his line of credit other $100,000. Unfortunately, Reed’s large time banker and relay touch received a progress and will no nightlong be helping Reed’s out. Holmes is now in charge of Reed’s account he is requesting payment on the note inwardly 30 days with no line increase. Holmes has suggested that Reed’s has a inventory decline sale to gain capital of the United States ground. Reed’s is loath(predicate) of this idea because he feels that trim down inventory would reduce his sales and make it even harder to find current on his accounts. Holmes had countered this inclination by saying that he thought his sales would be reduced less than 5 percent annually, and that by not...If you spillage to get a dear essay, order it on our website: Ordercustompaper.com

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