The text mentions that Amazon has a negative cash conversion cycle. Think about what this means. Assume
Question:
The text mentions that Amazon has a negative cash conversion cycle. Think about what this means. Assume Amazon’s Cash Conversion Cycle is -20 days. Try to estimate what this was worth to Amazon in FY 2021 using company-level data, i.e., you don’t need to worry about breaking out separate business units). Make whatever assumptions you feel are necessary. There is no “right” answer, but it is likely that some answers will be more reasonable than others. I would not spend more than 20 – 30 minutes on this question. Think about what’s going on and how you might estimate the value and do a back-of-the-envelope calculation, i.e., your answer should be a number and you should show how you came up with it. Note that I am not asking you to calculate the Cash Conversion Cycle, but instead telling you to assume it’s -20 and then asking you to estimate what this is worth on an annual basis.
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey