The Artisan Shutter Company which makes custom shutters, writing homework help

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The Artisan
Shutter Company which makes custom shutters for high end residential and
commercial buildings is seeing loss in cash flow due to declining
economic conditions of the housing market. Half of the company’s
customers started making late payments, this was seen in reduced cash
flows. The cash flows were not sufficient to support the current
operations and resulted in the company needing to lay off 15% of its
employees (Garrison, Noreen, & Brewer, 2015, p. 640).
From the
mid-1990s through 2005 home prices surged making residential real estate
a great investment and Wall Street firms took notice and investors
started to invest in mortgage backed securities (Tanneeru, 2009). This
was good as long as everyone was paying their mortgage, “[But] we didn’t
take into account with these mortgages that people might lose their
jobs, the interest rate might go up and the housing prices may go down.
Guess what? All three happened.” (Tanneeru, 2009)
As the referenced
article above states it was a perfect storm. Housing prices peaked in
the second quarter of 2007, and started to steadily decline (U.S.
Federal Housing Finance Agency, 2017). Unemployment also started to
increase finishing 2006 at 4.4 and the following year in December at 5.0
(Bureau of Labor Statisics, 20017). These conditions also had an impact
on the availability of credit, because banks became stricter on loans
and lines of credit.
Business started to delay payments to their
suppliers making it difficult for Artisan Shutter Company to collect
cash from its customers, which is a cash inflow. The smaller suppliers
such as Artisan Shutter Company were the ones to first have payments
delayed. “Small businesses are hugely dependent on their cash flow, so
they must either cut costs or scramble to find alternative funding if
they aren’t being paid on time. With money tight and bank loans hard to
get, a cash-strapped company can easily be pushed to the brink.” (Spors
& Covel , 2008)
Artisan Shutter Company tried to weather the
storm of decreased money supply by cutting employment by 15% (Garrison,
Noreen, & Brewer, 2015). But, reducing staff is only one method to
ease their current position. A more aggressive approach to collecting on
outstanding invoices and making customers pay upfront could also create
cash inflows much needed. They could also review the impact of delaying
payments owed to suppliers to free cash flows up. Amazon stretched the
numbers of days it took to pay suppliers from 63 to 72 and while sales
increased by 28% its accounts payable nearly doubled causing a 116%
increase in free cash flow. (Garrison, Noreen, & Brewer, 2015, p.
653)

Works Cited
Bureau of Labor Statisics. (20017, April
5). Labor Force Statistics from the Current Population Survey. Retrieved
from Databases, Tables & Calculators by Subject: https://data.bls.gov/pdq/SurveyOutputServlet
Garrison, D. R., Noreen, P. C., & Brewer, P. C. (2015). Managerial Accounting, 15th e.d. New York: McGraw Hill.
Spors,
K. K., & Covel , S. (2008, Oct 31). Slow Payments Squeeze
Small-Business Owners. Retrieved from The Wall Street Journal: https://www.wsj.com/articles/SB122540968964686203
Tanneeru, M. (2009, Jan 29). How a ‘perfect storm’ led to the economic crisis. Retrieved from CNN: http://www.cnn.com/2009/US/01/29/economic.crisis.e…
U.S.
Federal Housing Finance Agency. (2017, April 5). All-Transactions House
Price Index for the United States [USSTHPI]. Retrieved from Federal
Reserve Bank of St. Louis: https://fred.stlouisfed.org/series/USSTHPI

PLEASE RESPOND TO THIS, I HAVE TO COMPLETE A PEER REVIEW ON THE ABOVE.

a) Point out what you perceived to be the strengths of the initial posting along with supporting rationale.
b)
Identify specific opportunities for improvement with regard to the
content in the initial posting. Furthermore, you should provide
supporting rationale for your stated position, as well as concrete
suggestions and guidance intended to strengthen the effectiveness of the
content.

For this response, should outside
sources be used to support the content within the postings, proper
in-text citations and correctly formatted references should be prepared
consistent with the APA (6th edition). The list of references should be
physically positioned at the end of the postings.

THANKS,

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