An analyst is examining the cash conversion cycles and their components for three companies that she covers in the leisure products industry. She believes that changes in the investments in these working capital accounts can reveal liquidity stresses on a company.

Which company’s operating cycle appears to have caused the most liquidity stress?
A. Company H’s B. Company J’s C. Company S’s

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2021 2020 2019 2018 2017 2016 Company H Days of inventory on hand 68.4 70.5 60 57.8 59.8 59.8 + Days of receivables 101.8 103.4 95.6 92.4 94.7 93.3 - Days of payables outstanding 52.1 54.6 48 41.9 36.8 35.9 = Cash conversion cycle 118.1 119.3 107.6 108.3 117.7 117.2 Company J Days of inventory on hand 105.6 101.4 96.3 105.2 103.2 101.4 + Days of receivables 27.7 29.4 32.9 36.3 37.8 38 - Days of payables outstanding 36.6 38.5 35.3 39.3 37.8 40.2 = Cash conversion cycle 96.7 92.3 93.9 102.2 103.2 99.2 Company S Days of inventory on hand 135.8 131 118.9 69.2 63.4 81.7 + Days of receivables 49.1 42.5 54.2 36.2 29.1 38.3 - Days of payables outstanding 30.9 27.9 34.6 29.8 31.8 35.9 = Cash conversion cycle 154.0 145.6 138.5 75.6 60.7 84.1