Below are the financial statements of two general contractors. The two companies are primarily commercial builders, as opposed to residential builders. They typically bid for the opportunity to build such facilities as office buildings, hospitals, and university buildings. As the general contractor, they use subcontractors who undertake most of the of most of the actual work.

* All percentages have been rounded. Compute the cash conversion period for each company, and interpret your findings.

BRC Inc. Arch Construction 4.196 10.2% 58.7% 50.4% 42.7% $ 1,199,921 14,704,137 12,460,468 21,482 $ 28,386,008 807,592 $ 29,193,600 $ 2,826,328 16,239,811 7,307,234 34,067 $ 26,407,440 1,252.408 $ 27,659,848 26.496 0.1% 0.1% 97.2% 2.8% 100.0% 95.5% 45% 100.0% Balance Sheets Assets Current assets: Cash Short-term investments Accounts receivable Other current assets Total current assets Property and equipment TOTAL ASSETS Debt (Liabilities) and Equity Current liabilities: Short-term notes Accounts payable Accrued liabilities Total current liabilities Long-term debt Total debt Stockholders' equity: Common stock Paid in capital Retained earnings Total stockholders' equity TOTAL DEBT AND EQUITY *All percentages have been rounded. $ 72,322 19,975,233 899,472 $ 20,947,027 1,862,265 $ 22,809,292 0.296 68.4% 3.1% 71.8% 6.496 78.1% $ 79,564 14,898,131 2,068,695 $ 17,046,390 1,782,700 $ 18,829,090 0.396" 53.9% 7.5% 61.7% 6.4% 68.1% 0.096 0.0% $ 4,254 768,281 5,611,773 $ 6,384,308 $ 29,193,600 2.696 19.2% $ 4,254 768,281 8,058,223 8,830,758 $ 27,659,848 2.896 29.196 31.9% 100.096 21.9% 100.0% BRC.Inc. Arch Construction 100.0% (93.53% 6.5% 1.8% 8.3% Income Statements Construction revenues Cost of goods sold Gross profits Interest income Total revenues Operating expenses Interest expense Other expense Total expenses Net profits * All percentages have been rounded. $ 90,070,000 (86,889,570) $ 3,180,430 941,631 $ 4,122,061 1,665,711 226,367 79,630 $ (1,971,708) $ 2,150,353 100.0%* (96.5)% 3.5% 1.0% 4.696 1.8% 0.3% 0.196 (2.2)% 2.49 $72,822,725 (68,090,781) $ 4,731,944 1,308,801 $ 6,040,745 2,033,400 172,158 123,737 S (2,329,295) $ 3,711,450 2.8% 0.2% 0.2% (3.2) 5.1%