The working capital policies of the company that include account receivables days, payables days and inventory days have more or less remained stable in past three years, which means that the owner has tight control over the company’s working capital policies…………. It also obtains discounts on bulk purchases, reducing much of its purchase costs. The company purchases its supplies in bulk ahead of sales and stores them, emphasizing on conservative operational policies of the owner. The consistent increase in accounts receivable and inventory further emphasize on the company’s improving growth. The company has shown a consistent growth in the operating profit until 2003, and significant growth in 2004, which shows its ability to generate cash. It obtains its supplies in bulk from a few large suppliers. The Cartwright Company distributes lumber products and works with the construction and retail operations. It is anticipated from the past growth levels, and the company’s cost control and price competitiveness that the market position of the company is stable and will improve further in the future. The demand of the company is seasonal, since 55% of the sales are made in the period between April and September. The driving force behind the level of growth is tight operating policies and successful price competition of the company. The sales growth of the company was 19% in 2002, and it grew further to 34% in 20, providing an impressive signal for the lenders. If your Georgia business is experiencing rapid growth and has caused cash flow. Hence, in times of economic downturn, even if construction revenues decline the repair revenues keep the sales up. How Can My Georgia (GA) Business Benefit from Accounts Receivable Financing. There are two sources of revenues of the company: construction and repair. The sales are expected to increase up to $3.6 million and if the lumber prices rise, a further increase in revenues is expected.  The Cartwright Company has experienced a rapid growth in the first quarter of 2004, and expects substantial increase in sales in the year. Cartwright can pursue his expansion from his current loan agreement with the suburban bank, and should not increase his debt to avoid future cash flow problems. The company has experienced significant growth in present however, it has experienced shortage of cash and is considering making up with the shortage of gap by borrowing. The business is now owned and managed solely by Cartwright, and the major products include Plywood, Moldings, and Sash and Door. The Cartwright Lumber Company, founded in 1994 by Mark Cartwright and his brother-in-law, Henry Start, is a retail distribution company of lumber products. Cartwright Lumber Company Case Study Solution
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