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2-3: An analyst has collected the following information for Yunnan Baiyao Group Co.: In billion RMB 2015 2016 2017 2018 2019 Sales 20.74 22.41 24.32
2-3: An analyst has collected the following information for Yunnan Baiyao Group Co.: In billion RMB 2015 2016 2017 2018 2019 Sales 20.74 22.41 24.32 27.02 29.67 Net Income 2.756 2.931 3.133 3.48 4.173 Cash inflow from 22.61 27.41 28.86 40.89 34.13 operating activities CFFO 2.18 2.985 1.156 1.549 2.105 Notes/Accounts receivable 4.66 4.96 5.53 5.03 3.85 Prepaid expenses 0.33 0.47 0.42 0.61 0.58 Notes/Accounts payable 3.22 4.38 4.57 5.68 6.24 Inventory 5.63 6.92 8.66 11.03 11.75 Unearned revenue 0.43 1.07 1.09 1.04 1.17 Required: a) Calculate the ratio of operating cash collection over sales b) Based on your calculation in part a), explain why the ratio could be greater (smaller) than one. c) Calculate the ratio of CFFO over net income. d) Based on your calculation in part c), explain why the ratio could be greater (smaller) than one
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