Wk 4 Reed's Clothier Shannan Coleman

Wk 4 Reed's Clothier Shannan Coleman - Reeds Clothier Case...

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1 Reed’s Clothier Case Study Shannan Coleman 9/14/2011 Week 2 Individual Assignment Cindy Bayer
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2 Reed’s Clothier Case Study Summary Jim Reed II who is the owner of Reed’s Clothier is in financial burden and will soon lose his financing through Bank of First Virginia National. Although Reed has an inventory worth $491,000, he still short $45,000 of the $130,000 needed for the closing note that is drawing near. To insure that he can meet the deadline Reed must turn at least 10% of his inventory into cash. To help him do this he needs to create a financial ratio, which will find the company’s standing in the past, present, and future. Harold Holmes, Reed’s new personal banker suggests that rapid changes need to be done to regain control and pay off debts. Holmes also suggest to hire a consultant who will Reed establish a better inventory system. The consultant will help Reed with Holmes’ last suggestion which is to reduce the store’s inventory and accounts receivable to industry averages. Reed does not think that reducing his inventory is a good idea because it could reduce his sales and make it harder from him to become current and expresses this to Holmes. Holmes tells Reed that it would only make 5% difference and at this point he really has no other choice, or he will never raise enough money to get Reed’s clothiers out of the burden it is in. Answers
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This note was uploaded on 09/21/2011 for the course FIN 370 taught by Professor Unknown during the Spring '08 term at University of Phoenix.

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Wk 4 Reed's Clothier Shannan Coleman - Reeds Clothier Case...

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