Annual report Case: the Operating Cycle and Financing period
Business Application- Write a brief memorandum to your instructor describing CVs's operating cycle and financing period. To do this, refer to the CVS annual report in the Supplement to Exhibits 5 and 8. Your memorandum should identify the most common transactions in the operating cycle as they apply to CVS. It should also refer to the importance of accounts receivable, accounts payable, and merchandise inventory in CVS's financial statements. Recall from previous chapters that CVS had inventory days on hand of about 44 days, days' receivable of 19 days, and days payable of 21 days. Complete the memorandum by explaining why CVS's operating cycle and financing period are favorable to the company.