Cash Conversion Cycle Analysis

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Description

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

Reserch Walmart website.

Review the selected company's most recent financial statements- 2016.

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 5-7 slides PowerPoint presentation 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.

Format your presentation consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

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Cash Conversion Cycle Analysis Grading Guide FIN/419 Version 6 Finance for Decision Making Copyright Copyright © 2017, 2016, 2015, 2010 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Edited in accordance with University of Phoenix® editorial standards and practices. Cash Conversion Cycle Analysis Grading Guide FIN/419 Version 6 Individual Assignment: Cash Conversion Cycle Analysis 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. Resources Required Microsoft® Excel® Grading Guide Content Met Partially Met Not Met Total Available Total Earned 5 #/5 The student located and used the Financial Statements for Walmart for 2016. The student calculated the following cash conversion cycle ratios based on the financial statements using Microsoft® Excel®: • • • Average inventory Inventory turnover rate Production cycle The student calculated the following cash conversion cycle ratios based on the financial statements using Microsoft® Excel®: • • • Average account receivable Account receivable turnover Average collection cycle The student explained in 5-7 slides 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. Comments: 2 Cash Conversion Cycle Analysis Grading Guide FIN/419 Version 6 Writing Guidelines Met Partially Met Not Met Total Available Total Earned 3 #/3 8 #/8 The presentation—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed including spelling and punctuation. Assignment Total Additional comments: # Comments: 3
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Explanation & Answer

Attached.

Ratio
Average inventory

Formula
Sales/Average Total Inventory (Beginning + Ending Inventory)
500343/ [(19882+204522)/2]

Cost of Goods Sold/ Total Inventories (Beginning Inventory + Ending Inventory/2)
Inventory turnover rate373396/ [(43046 + 43783)/2]
Production Cycle
(Days Sales Outstanding + Days Inventory) – Days Payabl
(Accounts Receivable/ Revenues)* Days in Periods
Average account receivable
Total Inventories (Beginning Inventory + Ending Inventory)/2]/Cost of Goods Sold)* Days Period
Average collection cycle
of Goods Sold/Total Inventories. (Beginning inventory + Ending Inventory/2)
Account receivableCost
turnover

Calculation
500343/ 201673.5

Value
2,480955604

Graph of Cash Conversion Ratios For Walmart

373396/43414.5
4.1 + 42.44 – 45.06

8,600720957
1,48
Average collection cycle

(5614/500343)* 4.10
0,046003242
[(43046+43783)/2]/ 3733960*365
42,43830277
102640/(50147 + 43783)2 2,185457255

Average account receivable
Production Cycle

Inventory turnover rate

Average inventory
0

5

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25

Ratios For Walmart

25

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35

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45


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It measures the liquidi...


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