1. Cash Conversion Cycle & Ratios

Target

Sales = 74,433,000,000

Cost of goods sold = 53,299,000,000

Inventory = 9,497,000,000

Accounts receivable = 468,000,000

Accounts payable = 1,127,000,000

Inventory conversion period = 65.04

Average collection period = 2.29

Payables deferral period = 7.72

CCC = 59.61

Nike

Sales = 36,397,000,000

Cost of goods sold = 20,441,000,000

Inventory = 5,261,000,000

Accounts receivable = 3,498,000,000

Accounts payable = 2,279,000,000

Inventory conversion period = 93.94

Average collection period = 35.08

Payables deferral period = 40.69

CCC = 88.33

McDonalds

Sales = 21,025,000,000

Cost of goods sold = 2,200,000,000

Inventory = 51,100,000

Accounts receivable = 2,441,500,000

Accounts payable = 1,207,900,000

Inventory conversion period = 8.48

Average collection period = 42.39

Payables deferral period = 2.00

CCC = 48.87

Best Buy

Sales = 42,151,000,000

Cost of goods sold = 32,275,000,000

Inventory = 5,209,000,000

Accounts receivable = 1,049,000,000

Accounts payable = 4,873,000,000

Inventory conversion period = 58.91

Average collection period = 9.08

Payables deferral period = 55.11

CCC = 12.88

Amazon

Sales = 232,887,000,000

Cost of goods sold = 139,156,000,000

Inventory = 17,174,000,000

Accounts receivable = 16,677,000,000

Accounts payable = 38,192,000,000

Inventory conversion period = 45.05

Average collection period = 26.14

Payables deferral period = 100.18

CCC = -28.99

*Compare and analyze thoroughly the CCC for the five companies

1. Analyze the CCC for the five companies. How does the CCC compare across the different companies?

2. Analyze the relationship between CCC and the companys profitability for all five companies

3. Analyze the relationship between CCC and the size of the company (measured by total assets) for all five companies