Cash conversion cycl
- Go to http://finance.yahoo.com and get a quote for one company of your choice. On the left column, scroll down and select “Income Statement.” Write down the annual sales and cost of goods sold for the most recent two years.
- Select the firm’s Balance Sheet. Write down the balances shown for the firm’s inventories, accounts receivable, and accounts payable.
- Using the information from parts a and b, calculate its inventory turnover, accounts receivable turnover, and accounts payable turnover. You should show your work!
- Calculate production cycle, collection cycle, and accounts payable cycle. You should show your work!
- What is the company’s cash conversion cycle? You should show your work!
- Discuss the results that you receive in one paragraph. Should the company decrease cash conversion cycle?
- Compare the cash conversion cycles of your company with the cash conversion cycle in another student’s posting. What factors are responsible for these differences? Are these differences firm specific or are they consequences of the nature of the businesses in which these firms operate?
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