Question: A company's operating cycle is the time frame from when a company buys materials until it obtains cash for the sale of an item. Consider
A company's operating cycle is the time frame from when a company buys materials until it obtains cash for the sale of an item.
Consider a business that you have worked for or you are familiar with or utilize a fictitious company. The supervisor would like an analysis of the efficiency of the operations.
include the following:
- Draw an operating cycle of the company.
- Predict the length of the cash conversion cycle within that cycle.
- Determine the working capital needs of the company.
- Discuss the need for liquidity to conduct business.
- Show how efficiency ratios can be used to determine the best way to conduct the operations of the company.
- Provide recommendations to improve efficiency.
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