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The ArtisanShutter Company which makes custom shutters for h

    The ArtisanShutter Company which makes custom shutters for high end residential andcommercial buildings is seeing loss in cash flow due to decliningeconomic conditions of the housing market. Half of the company’scustomers started making late payments, this was seen in reduced cashflows. The cash flows were not sufficient to support the currentoperations and resulted in the company needing to lay off 15% of itsemployees (Garrison, Noreen, & Brewer, 2015, p. 640). From themid-1990s through 2005 home prices surged making residential real estatea great investment and Wall Street firms took notice and investorsstarted to invest in mortgage backed securities (Tanneeru, 2009). Thiswas good as long as everyone was paying their mortgage, ‘[But] we didn’ttake into account with these mortgages that people might lose theirjobs, the interest rate might go up and the housing prices may go down.Guess what? All three happened.’ (Tanneeru, 2009) As the referencedarticle above states it was a perfect storm. Housing prices peaked inthe second quarter of 2007, and started to steadily decline (U.S.Federal Housing Finance Agency, 2017). Unemployment also started toincrease finishing 2006 at 4.4 and the following year in December at 5.0(Bureau of Labor Statisics, 20017). These conditions also had an impacton the availability of credit, because banks became stricter on loansand lines of credit. Business started to delay payments to theirsuppliers making it difficult for Artisan Shutter Company to collectcash from its customers, which is a cash inflow. The smaller supplierssuch as Artisan Shutter Company were the ones to first have paymentsdelayed. “Small businesses are hugely dependent on their cash flow, sothey must either cut costs or scramble to find alternative funding ifthey aren’t being paid on time. With money tight and bank loans hard toget, a cash-strapped company can easily be pushed to the brink.” (Spors& Covel , 2008) Artisan Shutter Company tried to weather thestorm of decreased money supply by cutting employment by 15% (Garrison,Noreen, & Brewer, 2015). But, reducing staff is only one method toease their current position. A more aggressive approach to collecting onoutstanding invoices and making customers pay upfront could also createcash inflows much needed. They could also review the impact of delayingpayments owed to suppliers to free cash flows up. Amazon stretched thenumbers of days it took to pay suppliers from 63 to 72 and while salesincreased by 28% its accounts payable nearly doubled causing a 116%increase in free cash flow. (Garrison, Noreen, & Brewer, 2015, p.653)Works CitedBureau of Labor Statisics. (20017, April5). Labor Force Statistics from the Current Population Survey. Retrievedfrom Databases, Tables & Calculators by Subject:, 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 SqueezeSmall-Business Owners. Retrieved from The Wall Street Journal:, M. (2009, Jan 29). How a ‘perfect storm’ led to the economic crisis. Retrieved from CNN:…U.S.Federal Housing Finance Agency. (2017, April 5). All-Transactions HousePrice Index for the United States [USSTHPI]. Retrieved from FederalReserve Bank of St. Louis: 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 thecontent in the initial posting. Furthermore, you should providesupporting rationale for your stated position, as well as concretesuggestions and guidance intended to strengthen the effectiveness of thecontent.For this response, should outsidesources be used to support the content within the postings, properin-text citations and correctly formatted references should be preparedconsistent with the APA (6th edition). The list of references should bephysically positioned at the end of the postings.THANKS,

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