Purpose of Assignment
The purpose of this assignment is to help students gain a better understanding of calculations of cash flow and strategies to increase it.
Select a multinational company from the following industries:
- Computer Hardware
Review the selected company’s most recent financial statements.
Calculate the following cash conversion cycle ratios based on the financial statements using Microsoft® Excel®:
- Average inventory
- Inventory turnover rate
- Average account receivable
- Account receivable turnover
- Average collection cycle
Explain in 700 words the importance of the cash conversion cycle, including:
- Discuss the purpose of the cash conversion cycle and its components.
- Analyze the results obtained in the cash conversion cycle equations.
- Propose strategies to increase the cash flows of the company under study.