Cash Operating Cycle for Apple and 3M Numbers in Days Average Days Sales Outstanding... + Average Days Inventory Outstanding. Average Days Payable Outstanding. Average Cash Conversion Cycle Apple Inc. 26.7 days 5.8 days 85.2 days (52.7) days 3M Company 50.6 days 85.9 days 42.2 days 94.3 days DSO (the number of days that accounts receivable are outstanding before they are paid) = (365*average accounts receivable)/Sales; DIO = (365*average inventory)/COGS; DPO=(365*average accounts payable)/COGS The negative cash cycle for Apple implies that it can invest the cash it receives from sales for 52.7 days before making payment to suppliers. 3M is a more typical cash operating cycle. 3 2018 2019 81.22 Microsoft Days Sales Outstanding Days Inventory Outstanding Days Payable Outstanding Cash Conversion Cycle 6/30/2018 6/30/2017 $11,946,000 $121,822,000 $26,481,000 $2,662,000 $6,751,000 $169,662,000 $7,663,000 $125,318,000 $22,431,000 $2,181,000 $5,103,000 $162,696,000 2. MICROSOFT Annual Balance Sheet (values in 000's) PERIOD ENDING: 6/30/2019 CURRENT ASSETS Cash and Cash Equivalents $11,356,000 Short-Term Investments $122,463,000 Net Receivables $29,524,000 Inventory $2,063,000 Other Current Assets $10,146,000 Total Current Assets $175,552,000 LONG-TERM ASSETS Long-Term Investments $2,649,000 Fixed Assets $43,856,000 Goodwill $42,026,000 Intangible Assets $7,750,000 Other Assets $14,723,000 Deferred Asset Charges $0 Total Assets $286,556,000 CURRENT LIABILITIES Accounts Payable $21,877,000 Short-Term Debt / Current Portion of Long-Term Debt $5,516,000 Other Current Liabilities $42,027,000 Total Current Liabilities $69,420,000 Long-Term Debt $66,662,000 Other Liabilities $43,381,000 Deferred Liability Charges $4,763,000 Misc. Stocks $0 Minority Interest $0 Total Liabilities $184,226,000 $1,862,000 $36,146,000 $35,683,000 $8,053,000 $7,442,000 $6,023,000 $30,289,000 $35,122,000 $10,106,000 $6,076,000 $0 $250,312,000 $0 $258,848,000 $16,841,000 $13,927,000 $3,998,000 $37,649,000 $58,488,000 $72,242,000 $41,044,000 $4,356,000 $0 $0 $176,130,000 $10,121,000 $31,697,000 $55,745,000 $76,073,000 $22,406,000 $8,377,000 $0 $0 $162,601,000 6/30/2018 $110,360,000 $38,353,000 $72,007,000 6/30/2017 $96,571,000 $34,261,000 $62,310,000 Annual Income Statement (values in 000's) PERIOD ENDING: 6/30/2019 Total Revenue $125,843,000 Cost of Revenue $42,910,000 Gross Profit $82,933,000 OPERATING EXPENSES Research and Development $16,876,000 Sales, General and Admin. $23,098,000 Non-Recurring Items $0 Other Operating Items $0 Operating Income $42,959,000 Add'l income/expense items $729,000 Earnings Before Interest and Tax $43,688,000 Interest Expense $0 Earnings Before Tax $43,688,000 Income Tax $4,448,000 Minority Interest $0 Equity Earnings/Loss Unconsolidated Subsidiary $0 Net Income-Cont. Operations $39,240,000 Net Income $39, 240,000 $14,726,000 $22,223,000 $0 $0 $35,058,000 $1,416,000 $36,474,000 $0 $36,474,000 $19,903,000 $0 $13,037,000 $19,942,000 $306,000 $0 $29,025,000 $876,000 $29,901,000 $0 $29,901,000 $4,412,000 $0 $0 $16,571,000 $16,571,000 $0 $25,489,000 $25,489,000 1. Calculate cash conversion cycles for Apple and Microsoft, including average days sales outstanding (DSO), average days inventory outstanding (DIO), and average days pavable outstanding (DPO)