Question: 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.
Assignment Steps
Select a multinational company from the following industries:
• Retail
• Pharmaceutical
• Computer Hardware
• Manufacturing
• Automotive
Review the selected company's most recent financial statements.
Calculate the following cash conversion cycle ratios based on the financial statements usingMicrosoft® 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.