Essay about Strategic Financial Management

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Strategic Financial Management University of Phoenix Finance for Managerial Decision Making / FIN 554 Professor Greg Garay January 17, 2006 Table of Contents Abstract……………………………………………………………………………………………3 Strategic Financial Management…………………………………………………………………..4 Working Capital Management…………………………………………………………………….4 The Kmart Corporation Debacle…………………………………………………………………..5 Long-Term and Short-Term Strategies…………………………………………………….. 6 Financial Performance………………………………………………………………………. 7 To Merge or Not to Merge………………………………………………………………………...7 Reasoning for the Merger…………………………………………………………………….8 Pros and Cons for the Merger……………………………………………………………… 9 Morale Issues…………………………………………………………………………………9 Managing International…show more content…
A cash balance of $50,000 needs to be maintained in the cash flow account after the loans are repaid. However, the recent late payment by Mayo, Lawrence Sports' principal customer, and the delay of payment to its other debtors, Gartner Products and Murray Leather Works, have eroded the company's profits and crippled the effects on its business and partner relationships. Therefore, Saunders needs negotiate short-term payment and collection strategies in order to keep the amount invested in loans to a minimum, aid in the solution of the challenge of balancing working capital and debt, and learn to manage its debtors more efficiently. The Kmart Corporation Debacle The Kmart Corporation and its highly publicized bankruptcy, resulting from its immense working capital problems, resemble those displayed in the simulation discussed. Kmart, a corporation headquartered in Troy, Michigan, is a large discount and general merchandise retailer. In 2001, Kmart was accused in litigation of making an ill-advised and reckless over purchase of inventory, in the approximate amount of $850 million, in order to stock its shelves for the holiday season. This overbuy dramatically impacted the liquidity of the corporation. (Securities and Exchange Commission, 2001, p.1) The Chairman and Chief Executive Officer (CEO),
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