Selected information is presented below for two companies that compete in the same industry.

Required
Using this information, examine the details of how each company generates cash from operations.
A. Determine which company requires less time to convert inventory to sales. Consider this in relation to gross profit margins.
B. Determine which company requires less time to collect its receivables from its customers.
C. For each company and each year, examine and comment on the differences between net income and cash flow from operations. What does this show you about the operating strengths or weaknesses of thecompanies?

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Park Enterprises Schleifer, Inc. 2005 2004 2005 Sales revenue Cost of goods sold Ending accounts receivable Ending inventory From the statement of cash flows: 2004 $1,811 $1,476 $1,967 $2,212 1,391 1,137 1,773 1,641 386 355 317 115 314 216 299 132 Net income Depreciation and amortization (Increase) decrease in accounts $ 131 $ 79 (163 85 25 29 21 receivable (Increase) decease in inventory Increase (decrease) in accounts (21) 100 (86) (14) 87 223 (70) (137) payable and other current liabilities 62 26 S 341 $88 121 (32) Other items 19) Cash flow from operations 105 S (47