income statement Breakdown 12 30 2020 12 30 2019 12 30 2018 Total Revenue 34,608,000 31,904,000 30,578,000 Cost of Revenue 15,003,000 13,231,000 12,706,000 Gross Profit 19,605,000 18,673,000 17,872,000 Operating Expense 14,248,000 14,141,000 14,222,000 Operating Income 5,357,000 4,532,000 3,650,000 Net Non Operating Interest I 500,000 576,000 721,000 Other Income Expense 111,000 121,000 56,000 Pretax Income 4,968,000 4,077,000 2,873,000 Tax Provision 497,000 390,000 539,000 Net Income Common Stockh 4,495,000 3,687,000 2,368,000 Diluted NI Available to Com Sto 4,495,000 3,687,000 2,368,000 Basic EPS 2 54 2 09 1 35 Diluted EPS 2 50 2 06 1 33 Basic Average Shares 1,771,230 1,762,503 1,755,619 Diluted Average Shares 1,786,000 1,781,000 1,770,000 Total Operating Income as Repo 5,357,000 4,532,000 3,650,000 Total Expenses 29,251,000 27,372,000 26,928,000 Net Income from Continuing 4,495,000 3,687,000 2,368,000 Normalized Income 4,463,800 3,750,280 2,492,340 Interest Income 46,000 94,000 105,000 Interest Expense 546,000 670,000 826,000 Net Interest Income 500,000 576,000 721,000 EBIT 5,514,000 4,747,000 3,699,000 EBITDA Reconciled Cost of Revenue 13,808,000 12,153,000 11,606,000 Reconciled Depreciation 3,327,000 3,014,000 3,278,000 Net Income from Continuing Op 4,471,000 3,687,000 2,334,000 Total Unusual Items Excluding 8,000 70,000 195,000 Total Unusual Items 8,000 70,000 195,000 Normalized EBITDA 8,833,000 7,831,000 7,172,000 Tax Rate for Calcs 0 0 0 Tax Effect of Unusual Items 800 6,720 36,660 balance sheet Breakdown 12 30 2020 12 30 2019 12 30 2018 Total Assets 72,548,000 67,887,000 67,173,000 Current Assets 20,441,000 15,667,000 14,632,000 Cash, Cash Equivalents 7,148,000 4,140,000 4,086,000 Cash And Cash Equival 6,838,000 3,860,000 3,844,000 Other Short Term Invest 310,000 280,000 242,000 Receivables 6,414,000 5,425,000 5,182,000 Accounts receivable 6,414,000 5,425,000 5,182,000 Gross Accounts Rece 6,874,000 5,809,000 5,496,000 Allowance For Doubtf 460,000 384,000 314,000 Inventory 5,012,000 4,316,000 3,796,000 Raw Materials 1,270,000 972,000 890,000 Work in Process 712,000 560,000 499,000 Finished Goods 3,030,000 2,784,000 2,407,000 Prepaid Assets 1,867,000 1,786,000 1,559,000 Assets Held for Sale Current 9,000 Total non current assets 52,107,000 52,220,000 52,541,000 Net PPE 9,029,000 8,038,000 7,563,000 Gross PPE 18,793,000 16,799,000 15,706,000 Properties 0 0 0 Land And Improveme 538,000 519,000 501,000 Buildings And Improv 4,014,000 3,702,000 3,555,000 Machinery Furniture 12,884,000 11,468,000 10,756,000 Construction in Progr 1,357,000 1,110,000 894,000 Accumulated Depreciation 9,764,000 8,761,000 8,143,000 Goodwill And Other Inta 38,528,000 40,220,000 42,196,000 Goodwill 23,744,000 23,195,000 23,254,000 Other Intangible Assets 14,784,000 17,025,000 18,942,000 Investments And Advances 821,000 883,000 897,000 Non Current Deferred A 3,729,000 3,079,000 1,868,000 Non Current Deferred T 3,729,000 3,079,000 1,868,000 Other Non Current Assets 17,000 Total Liabilities Net Minority I 39,545,000 36,586,000 36,451,000 Current Liabilities 11,907,000 10,863,000 9,012,000 Payables And Accrued 11,687,000 9,385,000 8,805,000 Breakdown 12 30 2020 12 30 2019 12 30 2018 Total Assets 72,548,000 67,887,000 67,173,000 Current Assets 20,441,000 15,667,000 14,632,000 Cash, Cash Equivalents 7,148,000 4,140,000 4,086,000 Cash And Cash Equival 6,838,000 3,860,000 3,844,000 Other Short Term Invest 310,000 280,000 242,000 Receivables 6,414,000 5,425,000 5,182,000 Accounts receivable 6,414,000 5,425,000 5,182,000 Gross Accounts Rece 6,874,000 5,809,000 5,496,000 Allowance For Doubtf 460,000 384,000 314,000 Inventory 5,012,000 4,316,000 3,796,000 Raw Materials 1,270,000 972,000 890,000 Work in Process 712,000 560,000 499,000 Finished Goods 3,030,000 2,784,000 2,407,000 Prepaid Assets 1,867,000 1,786,000 1,559,000 Assets Held for Sale Current 9,000 Total non current assets 52,107,000 52,220,000 52,541,000 Net PPE 9,029,000 8,038,000 7,563,000 Gross PPE 18,793,000 16,799,000 15,706,000 Properties 0 0 0 Land And Improveme 538,000 519,000 501,000 Buildings And Improv 4,014,000 3,702,000 3,555,000 Machinery Furniture 12,884,000 11,468,000 10,756,000 Construction in Progr 1,357,000 1,110,000 894,000 Accumulated Depreciation 9,764,000 8,761,000 8,143,000 Goodwill And Other Inta 38,528,000 40,220,000 42,196,000 Goodwill 23,744,000 23,195,000 23,254,000 Other Intangible Assets 14,784,000 17,025,000 18,942,000 Investments And Advances 821,000 883,000 897,000 Non Current Deferred A 3,729,000 3,079,000 1,868,000 Non Current Deferred T 3,729,000 3,079,000 1,868,000 Other Non Current Assets 17,000 Total Liabilities Net Minority I 39,545,000 36,586,000 36,451,000 Current Liabilities 11,907,000 10,863,000 9,012,000 Payables And Accrued 11,687,000 9,385,000 8,805,000 Breakdown 12 30 2020 12 30 2019 12 30 2018 Total Assets 72,548,000 67,887,000 67,173,000 Current Assets 20,441,000 15,667,000 14,632,000 Cash, Cash Equivalents 7,148,000 4,140,000 4,086,000 Cash And Cash Equival 6,838,000 3,860,000 3,844,000 Other Short Term Invest 310,000 280,000 242,000 Receivables 6,414,000 5,425,000 5,182,000 Accounts receivable 6,414,000 5,425,000 5,182,000 Gross Accounts Rece 6,874,000 5,809,000 5,496,000 Allowance For Doubtf 460,000 384,000 314,000 Inventory 5,012,000 4,316,000 3,796,000 Raw Materials 1,270,000 972,000 890,000 Work in Process 712,000 560,000 499,000 Finished Goods 3,030,000 2,784,000 2,407,000 Prepaid Assets 1,867,000 1,786,000 1,559,000 Assets Held for Sale Current 9,000 Total non current assets 52,107,000 52,220,000 52,541,000 Net PPE 9,029,000 8,038,000 7,563,000 Gross PPE 18,793,000 16,799,000 15,706,000 Properties 0 0 0 Land And Improveme 538,000 519,000 501,000 Buildings And Improv 4,014,000 3,702,000 3,555,000 Machinery Furniture 12,884,000 11,468,000 10,756,000 Construction in Progr 1,357,000 1,110,000 894,000 Accumulated Depreciation 9,764,000 8,761,000 8,143,000 Goodwill And Other Inta 38,528,000 40,220,000 42,196,000 Goodwill 23,744,000 23,195,000 23,254,000 Other Intangible Assets 14,784,000 17,025,000 18,942,000 Investments And Advances 821,000 883,000 897,000 Non Current Deferred A 3,729,000 3,079,000 1,868,000 Non Current Deferred T 3,729,000 3,079,000 1,868,000 Other Non Current Assets 17,000 Total Liabilities Net Minority I 39,545,000 36,586,000 36,451,000 Current Liabilities 11,907,000 10,863,000 9,012,000 Payables And Accrued 11,687,000 9,385,000 8,805,000 a Compute the inventory days using cost of revenue as cost of goods sold and a 365 day year b Compute accounts receivable days using a 365 day year c Compute accounts payable days d Compute the cash conversion cycle for each year 4 How has CCC changed over the last few years 5 Compare inventory and receivables turnover ratios for the most recent year to those of its competitors a Compute inventory turnover ratio as cost of revenue inventory b Compute receivable turnover ratio as total revenue net receivables 6 Determine how cash conversion cycle would change if inventory and accounts receivable balances were adjusted to meet the industry averages 7 Determine the cash conversion cycle if its inventory and receivables turnover ratios were at the industry average and its payable days were 75 days 9 What are your impressions regarding working capital management based on this preliminary analysis Discuss any advantages and disadvantages of bringing the cash conversion cycle more inline with the industry averages

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income statement Breakdown 12/30/2020 12/30/2019 12/30/2018 Total Revenue 34,608,000 31,904,000 30,578,000 Cost of Revenue 15,003,000 13,231,000 12,706,000 Gross Profit 19,605,000 18,673,000 17,872,000 Operating Expense 14,248,000

income statement

Breakdown	12/30/2020	12/30/2019	12/30/2018
Total Revenue	34,608,000	31,904,000	30,578,000
Cost of Revenue	15,003,000	13,231,000	12,706,000
Gross Profit	19,605,000	18,673,000	17,872,000
Operating Expense	14,248,000	14,141,000	14,222,000
Operating Income	5,357,000	4,532,000	3,650,000
Net Non Operating Interest I^…	-500,000	-576,000	-721,000
Other Income Expense	111,000	121,000	-56,000
Pretax Income	4,968,000	4,077,000	2,873,000
Tax Provision	497,000	390,000	539,000
Net Income Common Stockh^…	4,495,000	3,687,000	2,368,000
Diluted NI Available to Com Sto^…	4,495,000	3,687,000	2,368,000
Basic EPS	2.54	2.09	1.35
Diluted EPS	2.50	2.06	1.33
Basic Average Shares	1,771,230	1,762,503	1,755,619
Diluted Average Shares	1,786,000	1,781,000	1,770,000
Total Operating Income as Repo^…	5,357,000	4,532,000	3,650,000
Total Expenses	29,251,000	27,372,000	26,928,000
Net Income from Continuing & ^…	4,495,000	3,687,000	2,368,000
Normalized Income	4,463,800	3,750,280	2,492,340
Interest Income	46,000	94,000	105,000
Interest Expense	546,000	670,000	826,000
Net Interest Income	-500,000	-576,000	-721,000
EBIT	5,514,000	4,747,000	3,699,000
EBITDA	-	-	-
Reconciled Cost of Revenue	13,808,000	12,153,000	11,606,000
Reconciled Depreciation	3,327,000	3,014,000	3,278,000
Net Income from Continuing Op^…	4,471,000	3,687,000	2,334,000
Total Unusual Items Excluding ^…	8,000	-70,000	-195,000
Total Unusual Items	8,000	-70,000	-195,000
Normalized EBITDA	8,833,000	7,831,000	7,172,000
Tax Rate for Calcs	0	0	0
Tax Effect of Unusual Items	800	-6,720	-36,660

balance sheet

Breakdown	12/30/2020	12/30/2019	12/30/2018
Total Assets	72,548,000	67,887,000	67,173,000
Current Assets	20,441,000	15,667,000	14,632,000
Cash, Cash Equivalents^…	7,148,000	4,140,000	4,086,000
Cash And Cash Equival^…	6,838,000	3,860,000	3,844,000
Other Short Term Invest^…	310,000	280,000	242,000
Receivables	6,414,000	5,425,000	5,182,000
Accounts receivable	6,414,000	5,425,000	5,182,000
Gross Accounts Rece^…	6,874,000	5,809,000	5,496,000
Allowance For Doubtf^…	-460,000	-384,000	-314,000
Inventory	5,012,000	4,316,000	3,796,000
Raw Materials	1,270,000	972,000	890,000
Work in Process	712,000	560,000	499,000
Finished Goods	3,030,000	2,784,000	2,407,000
Prepaid Assets	1,867,000	1,786,000	1,559,000
Assets Held for Sale Current	-	-	9,000
Total non-current assets	52,107,000	52,220,000	52,541,000
Net PPE	9,029,000	8,038,000	7,563,000
Gross PPE	18,793,000	16,799,000	15,706,000
Properties	0	0	0
Land And Improveme^…	538,000	519,000	501,000
Buildings And Improv^…	4,014,000	3,702,000	3,555,000
Machinery Furniture ^…	12,884,000	11,468,000	10,756,000
Construction in Progr^…	1,357,000	1,110,000	894,000
Accumulated Depreciation	-9,764,000	-8,761,000	-8,143,000
Goodwill And Other Inta^…	38,528,000	40,220,000	42,196,000
Goodwill	23,744,000	23,195,000	23,254,000
Other Intangible Assets	14,784,000	17,025,000	18,942,000
Investments And Advances	821,000	883,000	897,000
Non Current Deferred A^…	3,729,000	3,079,000	1,868,000
Non Current Deferred T^…	3,729,000	3,079,000	1,868,000
Other Non Current Assets	-	-	17,000
Total Liabilities Net Minority I^…	39,545,000	36,586,000	36,451,000
Current Liabilities	11,907,000	10,863,000	9,012,000
Payables And Accrued ^…	11,687,000	9,385,000	8,805,000

Breakdown	12/30/2020	12/30/2019	12/30/2018
Total Assets	72,548,000	67,887,000	67,173,000
Current Assets	20,441,000	15,667,000	14,632,000
Cash, Cash Equivalents^…	7,148,000	4,140,000	4,086,000
Cash And Cash Equival^…	6,838,000	3,860,000	3,844,000
Other Short Term Invest^…	310,000	280,000	242,000
Receivables	6,414,000	5,425,000	5,182,000
Accounts receivable	6,414,000	5,425,000	5,182,000
Gross Accounts Rece^…	6,874,000	5,809,000	5,496,000
Allowance For Doubtf^…	-460,000	-384,000	-314,000
Inventory	5,012,000	4,316,000	3,796,000
Raw Materials	1,270,000	972,000	890,000
Work in Process	712,000	560,000	499,000
Finished Goods	3,030,000	2,784,000	2,407,000
Prepaid Assets	1,867,000	1,786,000	1,559,000
Assets Held for Sale Current	-	-	9,000
Total non-current assets	52,107,000	52,220,000	52,541,000
Net PPE	9,029,000	8,038,000	7,563,000
Gross PPE	18,793,000	16,799,000	15,706,000
Properties	0	0	0
Land And Improveme^…	538,000	519,000	501,000
Buildings And Improv^…	4,014,000	3,702,000	3,555,000
Machinery Furniture ^…	12,884,000	11,468,000	10,756,000
Construction in Progr^…	1,357,000	1,110,000	894,000
Accumulated Depreciation	-9,764,000	-8,761,000	-8,143,000
Goodwill And Other Inta^…	38,528,000	40,220,000	42,196,000
Goodwill	23,744,000	23,195,000	23,254,000
Other Intangible Assets	14,784,000	17,025,000	18,942,000
Investments And Advances	821,000	883,000	897,000
Non Current Deferred A^…	3,729,000	3,079,000	1,868,000
Non Current Deferred T^…	3,729,000	3,079,000	1,868,000
Other Non Current Assets	-	-	17,000
Total Liabilities Net Minority I^…	39,545,000	36,586,000	36,451,000
Current Liabilities	11,907,000	10,863,000	9,012,000
Payables And Accrued ^…	11,687,000	9,385,000	8,805,000

Breakdown	12/30/2020	12/30/2019	12/30/2018
Total Assets	72,548,000	67,887,000	67,173,000
Current Assets	20,441,000	15,667,000	14,632,000
Cash, Cash Equivalents^…	7,148,000	4,140,000	4,086,000
Cash And Cash Equival^…	6,838,000	3,860,000	3,844,000
Other Short Term Invest^…	310,000	280,000	242,000
Receivables	6,414,000	5,425,000	5,182,000
Accounts receivable	6,414,000	5,425,000	5,182,000
Gross Accounts Rece^…	6,874,000	5,809,000	5,496,000
Allowance For Doubtf^…	-460,000	-384,000	-314,000
Inventory	5,012,000	4,316,000	3,796,000
Raw Materials	1,270,000	972,000	890,000
Work in Process	712,000	560,000	499,000
Finished Goods	3,030,000	2,784,000	2,407,000
Prepaid Assets	1,867,000	1,786,000	1,559,000
Assets Held for Sale Current	-	-	9,000
Total non-current assets	52,107,000	52,220,000	52,541,000
Net PPE	9,029,000	8,038,000	7,563,000
Gross PPE	18,793,000	16,799,000	15,706,000
Properties	0	0	0
Land And Improveme^…	538,000	519,000	501,000
Buildings And Improv^…	4,014,000	3,702,000	3,555,000
Machinery Furniture ^…	12,884,000	11,468,000	10,756,000
Construction in Progr^…	1,357,000	1,110,000	894,000
Accumulated Depreciation	-9,764,000	-8,761,000	-8,143,000
Goodwill And Other Inta^…	38,528,000	40,220,000	42,196,000
Goodwill	23,744,000	23,195,000	23,254,000
Other Intangible Assets	14,784,000	17,025,000	18,942,000
Investments And Advances	821,000	883,000	897,000
Non Current Deferred A^…	3,729,000	3,079,000	1,868,000
Non Current Deferred T^…	3,729,000	3,079,000	1,868,000
Other Non Current Assets	-	-	17,000
Total Liabilities Net Minority I^…	39,545,000	36,586,000	36,451,000
Current Liabilities	11,907,000	10,863,000	9,012,000
Payables And Accrued ^…	11,687,000	9,385,000	8,805,000

a. Compute the inventory days using “cost of revenue” as cost of goods sold and a 365-day year.

b. Compute accounts receivable days using a 365-day year.

c. Compute accounts payable days.

d. Compute the cash conversion cycle for each year.

4. How has CCC changed over the last few years?

5. Compare inventory and receivables turnover ratios for the most recent year to those of its competitors.

a. Compute inventory turnover ratio as cost of revenue/inventory.

b. Compute receivable turnover ratio as total revenue/net receivables.

6. Determine how cash conversion cycle would change if inventory and accounts receivable balances were adjusted to meet the industry averages.

7. Determine the cash conversion cycle if its inventory and receivables turnover ratios were at the industry average and its payable days were 75 days.

9. What are your impressions regarding working capital management based on this preliminary analysis? Discuss any advantages and disadvantages of bringing the cash conversion cycle more inline with the industry averages.