This essay focuses on working capital.have too much inventory which can also mean you have too much working capital
A dealer wants to make sure that customers have options when they come on the lot. However, having too many cars means you have too much inventory which can also mean you have too much working capital. It is not liquid if you do not make the sale. On the other hand, you may have only a few cars . And even if you sell them it is not enough to cover the short-term bills. A better question for you is how do you determine the right amount of working capital. a business should have? I do believe that you will find the attached article interesting. https://blackboard.strayer.edu/courses/1/FIN534167VA016-1218-
001/db/_97550610_1/embedded/Working%20Capital%20Week%2010.pdf Part 2 response one student below Working capital needs to be a balanced intiative in any business. Consider a lumber yard that has to pay for the lumber in bulk while only being able to sell it in much smaller parcels at a time. It is critical that they manage how much cash, inventory, short term debt, and liabilities they have at all times.Wandering customers draw the largest amount of traffic to the company while making up the smallest percentage of sales revenue. They have no specific need or desire in mind and are attracted by the location of the business more than anything else. These customers enjoy the social interaction of the shopping experience.
Therefore, spending too much time trying to appease this segment can draw away from the more profitable segments. Although this segment generates the least amount of sales revenue, providing insightful information about products to these customers can stimulate interest and ultimately result in a purchase.Need-based customers are driven by a specific need. In other words, they enter the store quickly, purchase what they need, and leave. These customers buy for a specific need or occasion and are hard to upsell. It is important to note that need-based customers can be easily drawn to other businesses.