Managing Growth Essay

Sunflower Nutraceuticals (SNC) operates on a very tight change flow. The past has not been had resources to stay above the water. SNC has been looking at some new projects and for the past nine years the projects and their impact on SNCs financial impact has been tracked. In the first phase of these new projects two were applied to SNC.Acquiring a New CustomerAtlantic Wellness was acquired as a new node. Sales were growthd significantly which in return also increase accounts due and inventory balances. This was a good decisions because as sales increase so does income. Additional accounts receivable and inventory can cause more overhead but can always be controlled.Leveraging Supplier DiscountsWith a new customer top-line growth was achieved. With the added expenses of more accounts receivable and inventory needs the cash flow for these three years was drained. It was however, offset by an added increase in EBIT due to favorable contracts.For the next three years two more proje cts were acquired. After the rapid increase in top-line growth and the increases it showed, SNC decided to pursue a new project that put SNCs products into Mega-Mart Inc. retail. This once again increased top-line growth which drives sales higher, it consistently strained the EBIT.Developing a Private stigmatizeSince retail has immersed for SNC a private label seemed logical to stand out for consumers. Starting the branding process for SNC. The sale of the private label drove EBIT up again balancing out the next three years.The final three years and the final projects were critical. Since one project after an new(prenominal) has off-set each other there is still a need to increase SNCs cash flow and sales.High-Risk CustomerAcquiring a high risk customer was a decision made with careful consideration. Since EBIT and net income were stable, sales was the next thing that needed to increase. Taking on Midwest Miracles increased the sales lot but the impact on the accounts receivables were large. Now there is talk in the business circle that Midwest Miracles is looking to file chapter 11 bankruptcy. This now leaves SNC with the preference of possibly writing off a portion of the accounts receivable that has not been collected.DecisionsThe projects that were adapted by SNC showed that the financial resources can be forecasted and balanced with the right numerate of research. Along with the increases and stabilizations SNCs available credit line that was negative in 2012 when the financial restructure projects started remained steady through 2021. The total new assets also increased each year proving to SNCs shareholders that a rapid increase in the value of the company has happened.Working Capital EffectsIn business accounting, workings capital is a benchmark measure of your companys ability to meet its short-term obligations. Its calculated by taking your business current assets and subtracting its current liabilities. Current assets are those that can or wil l be converted to cash in the next year. The major current assets are cash, accounts receivable and inventory. Current liabilities are obligations that must be fulfilled within the next year. For a typical company, the major current liabilities are accounts payable, accrued liabilities (such as recompense earned by workers but not yet paid, or rent expenses incurred but not paid), and debt payments (Chron, 2012). SNCs total liabilities were up after the nine years of projects.ReferenceThe Effect of Revenue Increase on Working Capital. (2014). Retrieved from