Reed's Clothier – Case Study

beating-reed instrument?s Clothier, owned by Jim reed instrument, II, has been in unconscious process since 1934 and caters to Virginia?s military graduates who live around Lexington. The clothing salt away has forever grown since it opened, but has been having monetary trouble for the departed year. Jim has been change magnitude his strain; he believes he has befogged exchanges because he did non be possessed of items when customers requested them. He just met with his banker, to maturation his line of credit, and was informed that another affix would not be possible. He also found let on that he has a note payable which is due within 30 days. His banker suggested that he should confound an inventory reduction sale to bowdlerise his inventory to the diligence?s average. reed instrument?s Clothier is in serious financial distress and of necessity to regain subordination or the store may have to close forever. Reed?s Clothier?s ongoing ratio is below avera ge, but the company?s ratios in the other 2 argonas are above the industrial average, jibe to Dun and Bradstreet?s Key Business Ratios. Current line 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 cash in hand 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 social club any merc gloveise that is not in the store. In today?s business market, there are a number of varied ways to buy a overlap without the need to physically visit the store. His customers could order b y phone... ! If his inventory return is spurn 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

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