Walmart Stores, Incorporated

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Management of Working Capital Case Study: “George’s Trains” This assignment consists of a profitable business ran by a man name “George.” George is aware that we are in a MBA Managerial Finance class and he needs advice on his working capital practices. George would like the answers to the following: • Describe his working capital practices, including his methods of capital budgeting analysis techniques. • Analyze the potential pitfalls in his capital budgeting practices that George should be aware of. • Develop a simple statement of cash flows for George’s Trains using any information gleaned from the video. What areas of improvement do you recommend? Well, first according to our text, capital budgeting is. Capital Budgeting…show more content…
According to Joyce Rosenberg, she states that “it makes it a little harder for small business to borrow and less likely they can repay the loan back (Rosenberg, 2000). After purchasing the shop Mr. Olieux had learned that the owner of the building wanted to sale the building. So, Mr. Olieux had to go back to the bank and ask for more capital for buying the building if he wanted the same location and so he did and the bank granted another loan. The area of concern here is that, if Mr. Olieux had cash flow already to invest in this business then another loan wouldn’t have been taken out but because he had no experience in this area and this only began as a hobby he didn’t think this through, however Mr. Olieux had an excellent relationship with the bank and good credit, so he was able to borrow the capital for his business. Mr. Olieux didn’t have any experience but he had to learn as his business grew. According to Doug Richard, “starting a business doesn’t happen overnight and it takes more than a person’s effort, if anything it takes a person way of thinking about their business” (Richard, 2006). So, Mr. Olieux had to learn the investment strategy of what to do about inventory on hand and how much to order due to his seasonal business, this was the key to his business thriving and being successful. References Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial Finance. [Electronic
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