QUESTION 1) Using 2019-2018 financial reports of ABC,

a) Calculate the followings for 2018 and 2019:

* Receivables turnover (use trade and other receivables)

* Days in Receivables

* Inventory turnover (use all costs before gross margin)

* Days in inventories

* Payables turnover (use trade and other payables)

* Days in payables

* Cash conversion cycle

b) Comment on the cash conversion cycle you found in Do you see an improvement in cash conversion cycle from 2018 to 2019 or not? Explain.

c) What would you suggest companies to improve their cash conversion cycles?

Consolidated statement of income (All amounts in Kuwaiti Dinars unless otherwise stated) Year ended 31 December 2019 2018 Note 15 16 29,594,584 (18,073,421) 17 4.1 (b) Revenue from contracts with customers Cost of providing services Cost of sale of equipment Cost of goods sold Gross profit General and administrative expenses Net impairment loss on financial assets Foreign exchange gain, net Other income Operating profit Finance costs Profit before directors' remuneration, contribution to Kuwait Foundation for Advancement of Sciences (KFAS), National Labour Support Tax (NLST) and Zakat Directors' remuneration KFAS NLST Zakat Profit for the year (63,584) 11,457,579 (2,595,129) (2,093,256) 332,492 1,817,851 8,919,537 (524,076) 41,961,348 (21,588,504) (218,182) (71,678) 20,082,984 (3,887,419) (585,564) 819,281 1,751,918 18,181,200 (347,110) 18 8,395,461 (60,000) (75,557) (258,013) (103,205) 7,898,686 17,834,090 (60,000) (160,520) (191,241) (186,712) 17,235,617 Attributable to: Shareholders of the Parent Company Profit for the year Earnings per share (Basic and diluted) (fils) 7,898,686 7,898,686 35.90 17,235,617 17,235,617 78.34 19 Consolidated statement of financial position (All amounts in Kuwaiti Dinars unless otherwise stated) As at Note 2019 2018 Assets Non-current assets Property and equipment Intangible assets Right-of-use assets 7 6 3 73,389,643 711,350 72,529,057 711,338 697,144 73,937,539 74,100,993 9 859,832 16,604,407 1,787,949 19,252,188 93,189,727 1,033,960 15,961,335 4,769,603 21,764,898 95,865,891 10 Current assets Inventories Trade and other receivables Bank balances and cash Total assets Equity and abilities Equity Share capital Share premium Statutory reserve Foreign currency translation reserve Retained earnings Total equity Liabilities Non-current liabilities Borrowings Lease liabilities Employees' end of service benefits 11 22,000,000 1,463,000 9,494,240 (30,262) 35,669,774 68,596,752 22,000,000 1,463,000 8,654,694 (13,941) 37,410,634 69,514,387 3,240,649 12 3 13 9,288,487 712,905 1,567,228 11,568,620 1,446,693 4,687,342 Current liabilities Trade and other payables Borrowings Lease liabilities 14 12 3 18,771,838 2,892,324 6,870,800 6,127,421 26,134 13,024,355 24,592,975 93,189,727 Total liabilities Total equity and liabilities 21,664,162 26,351,504 95,865,891