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Essay / Research Paper Abstract
This 3-page paper covers potential decisions made by the clothing store that could impact its cash flow. Bibliography lists 2 sources.
Page Count:
3 pages (~225 words per page)
File: D0_MTbelkcash.rtf
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Unformatted sample text from the term paper:
largest, privately-owned department store chain (Biesada, 2009). The Charlotte, NC-based company operates 300 stores in 15 states, mainly in the Southeast and Mid-Atlantic (Biesada, 2009). The stores sell mid-priced brand-name
and private label apparel, shoes and accessories (Biesada, 2009). Also for sale in the stores are gifts and home furnishings (Biesada, 2009).
During the past couple of years, Belk has been expanding its operations, which is the first impact on cash flow - its acquisitions. In 2006, the company bought the
Parisian chain from Saks, and previously had acquired Saks McRaes and Proffitts divisions (Biesada, 2009). In any acquisition situation, cash flow
can slow down as resources are being diverted to purchasing other assets. However, once the dust has settled and the assets are producing their own income, cash flow resumes and
is (presumably) greater from the new outlets absorbed into the organization. The impact here is that liquidity would move into non-liquid assets (i.e., new acquisitions). Liquidity returns to the cash
flow statement as the stores are absorbed into Belks accounting system, and cash generated can be put on the cash flow sheet.
The second activity that could impact cash flow is if Belk opted to expand its product lines. Right now, the company sells some home furnishings - if it opted
to move into other areas, such as kitchen appliances, this might have a temporary impact on cash flow. Inventory needs to be purchased, which could tie up assets until they
sell. Depending on the inventory turnover ratio, it could be awhile before the actual cash flow is realized from the addition of a new product line (or lines). What also
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