Assignment Task:
You are a financial analyst at Ravencorp, a manufacturer of farming machinery and equipment. Ravencorp's machinery is sold directly to agricultural producers. The agricultural producers work with the sales representatives of Ravencorp to customize farm machinery for the needs of their operation. The Chief Financial Officer of the Ravencorp has tasked you to explain the cash conversion cycle (CCC) to the Chief Operating Officer and the upper management of the Operations Department. The CFO is not happy with the current CCC of Ravencorp and would like to educate other departments about the CCC, so that they can be more informed about the CCC and also to help identify potential solutions for managing the CCC down to a more acceptable amount. The CFO has requested that you first describe the CCC calculation, the importance of the CCC and your ideas of some strategies that could be implemented to affect the CCC. In addition, as long as you are presenting information to the Operations Department, that you also help Operations understand Ravencorp's credit policies, in particular the four factors that affect credit policy.