Question #3 a. Calculate Mosaic's Cash Conversion Cycle (CCC) b. Based on Exhibit 2 (Industry Ratios), how does Mosaic Days Payable Outstanding; Days Sales Outstanding and Days Inventory Outstanding compare with the industry? c. Which of the working capital metrics should Mosaic Treasurer improve? Include your recommendations. d. How does Mosaic's cash conversion cycle compare to the industry? What does "cash conversion cycle" mean to you? e. What are the general problems of using ratio analysis? Liquidity Ratios Current ratio Quick ratio Peers/Industry 1.00 0.50 Working Capital Ratios Account Recievable Turnover Days Sales Outstanding (DSO) Inventory turnover Days Inventory Outstanding (DIO) Accounts Payable Turnover Days Payable Outstanding (DPO) Cash Conversion Cycle (CCC) 8.00 45.00 6.00 60.00 5.00 72.00 33.00 Profitability Return on Asset Return on Equity 10% 10% Leverage Total Debt Ratio Time interest ratio 40% 4.00 Note: Operating Income = Earnings Before Interest and Tax (EBIT) DSO-Days Sales Outstanding (Average Collection Period) DIO = Days Inventory Outstanding (Inventory Turnover Days) DPO = Days Payable Outstanding (Average days payables) Question #3 a. Calculate Mosaic's Cash Conversion Cycle (CCC) b. Based on Exhibit 2 (Industry Ratios), how does Mosaic Days Payable Outstanding; Days Sales Outstanding and Days Inventory Outstanding compare with the industry? c. Which of the working capital metrics should Mosaic Treasurer improve? Include your recommendations. d. How does Mosaic's cash conversion cycle compare to the industry? What does "cash conversion cycle" mean to you? e. What are the general problems of using ratio analysis? Liquidity Ratios Current ratio Quick ratio Peers/Industry 1.00 0.50 Working Capital Ratios Account Recievable Turnover Days Sales Outstanding (DSO) Inventory turnover Days Inventory Outstanding (DIO) Accounts Payable Turnover Days Payable Outstanding (DPO) Cash Conversion Cycle (CCC) 8.00 45.00 6.00 60.00 5.00 72.00 33.00 Profitability Return on Asset Return on Equity 10% 10% Leverage Total Debt Ratio Time interest ratio 40% 4.00 Note: Operating Income = Earnings Before Interest and Tax (EBIT) DSO-Days Sales Outstanding (Average Collection Period) DIO = Days Inventory Outstanding (Inventory Turnover Days) DPO = Days Payable Outstanding (Average days payables)