1 Consider the following financial statement information for Orologio SpA: Calculate the operating and cash cycles. How do you interpret your answer? (40 marks)

2 You have been hired by a manufacturing firm that is currently experiencing significant levels of financial distress. The managers have asked you to find ways in which the company can increase its cash levels so as to improve liquidity. Write a report to the managers, using figures to illustrate your answer, on how they can achieve this most efficiently. (60 marks)

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Item Inventory Accounts receivable Accounts payable Net sales Cost of goods sold Beginning () 44,234 43,211 35,603 360,302 120,400 Ending () 34,048 35,532 53,503