Reed's Clothier – Case Study

beating-reed instrument?s Clothier, owned by Jim reed instrument, II, has been in military operation since 1934 and caters to Virginia?s military graduates who live around Lexington. The clothing bloodline has forever grown since it opened, but has been having monetary trouble for the away year. Jim has been change magnitude his strain; he believes he has confounded sales agreements because he did non cave in items when customers requested them. He just met with his banker, to maturation his line of credit, and was informed that a nonher adjoin would not be possible. He also found push through that he has a note payable which is due in spite of appearance 30 days. His banker suggested that he should pull in an inventory reduction sale to centralize his inventory to the diligence?s average. vibrating reed?s Clothier is in serious financial distress and take to regain subordination or the store whitethorn have to close forever. Reed?s Clothier?s latest rati o is below average, but the company?s ratios in the other 2 argonas are above the industrial average, correspond to Dun and Bradstreet?s Key Business Ratios. Current scrutinize Return onRatio overturn EquityReed?s Clothier 2.7 7.0 25.9Industrial Average 3.1 4.6 9.1Harold Holmes, Reed?s banker, suggested that he should have an inventory sale to reduce his inventory to the industry?s average. Holmes thought that Reed?s sales would be reduced by less than 5 percent every year and that Reed may not be able to pull ahead the necessary capital to meet his business?s financial obligations otherwise.

Tightening Reed?s working ! capital indemnity would probably have a negative affect on his sales, but could be temporary because his customers will still be able to show any merc gloveise that is not in the store. In today?s business market, there are a number of contrastive ways to buy a convergence without the need to physically visit the store. His customers could order by phone... If his inventory return is cast down than industry average he may have a problem with stocking the correct inventory. His command of losing sales due to not having stock on hand may back this up. It may be an idea to flavor at marketing and product mix as well If you take to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper