Sunflower Nutraceuticals A Companys Efficiency And Its...

Sunflower Nutraceuticals Working Capital is defined as â€Å"a measure of both a company s efficiency and its short-term financial health. (Investopedia, 2016.)† Having an efficient working capital can make or break a business’s success. To expand on our experience with working capital, we ran the Harvard Business Publication Working Capital Simulation. In our simulation, we are co-owners of Sunflower Nutraceuticals (SNC), â€Å"an internet-based, direct-to-consumer distributor and retailer of dietary supplements, including vitamins, minerals, and herbs for women (Harvard Business Publication, 2014.)†, looking to create more working capital for the company so Sunflower Nutraceuticals can expand. We were told that SNC is breaking even with a flat annual sales growth on total revenues of $10 million. The company has struggled to finance the payroll, and more than once overdrawn on the line of credit in the past. SNC keeps the minimum amount of cash on hand ($300,000) to meet its operation al needs. A national bank, Miami Dade Merchant s Bank (MDM), has issued a line of credit with restrictive covenants; credit limit of $3,200,000, and rate of 8%. We were also provided with a forecast of the global nutraceuticals market. In 2010 the market worth was approximately $128.6 billion and forecasted to grow at a compound annual growth rate of 4.9% and reach $180.1 billion by 2017 (Harvard Business Publication, 2014.). After being given all of this information, it was up to us to makeShow MoreRelatedWorking Capital Simulation : Managing Growth Assignment1454 Words   |  6 Pagesmanagement is critical. Having inappropriate working capital management can lead to bad operational business. Part of a management team in a company is to make business estimations in regards the company’s future expected sales as well as costs. This is done to better understand the requirements of the company’s future working capital. In additional, this provides management some guide lines on how to raise the appropriate funds at the appropriate time without having to interrupt any business operations