Calculate the Cash Conversion Cycle (CCC) for each of the two companies in 2021 and 2022. Using your answer, analyse the efficiency of each of the two companies in managing their working capital in 2022 as compared to 2021. Note: ensure that you analyse in this question, not just describe the CCC values.

 

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+ Accent Group Limited (2021) Accent Group Limited (2022) Ridley Corporation Limited (2021) Inventory Days = Inventory / Average Daily Cost of Goods Sold Accounts Receivable Days= Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) Inventory Days = Inventory / Average Daily Cost of Goods Sold Accounts Receivable Days = Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) Inventory Days = Inventory/Average Daily Cost of Goods Sold Accounts Receivable Days = Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) = 216881000 / 1164600 = 49032000/ 2713991.781 = 186.23 + 18.07 - 128.32 = 149446000 / 1164600 = 128.32 = 241631000/ 1383539.726 = 47303000/ 3088972.603 = 143148000/ 1383539.726 = 174.65 + 15.31 - 103.47 = 81947000/ 2325189.041 = 111316000/ 2541695.89 169752000/ 2325189.041 186.23 = 35.24 + 43.80- 73.01 = 18.07 = 75.98 = 174.65 = 15.31 = 103.47 = 86.49 = 35.24 = 43.80 = 73.01 = 6.03 186 Days 18 Days 128 Days 76 Days 175 Days 15 Days 103 Days 86 Days 35 Days 44 Days 73 Days 6 Days Ridley Corporation Limited (2022) Inventory Days = Inventory / Average Daily Cost of Goods Sold Accounts Receivable Days = Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) = 117131000/ 2601432.877 = 127889000/ 2874208.219 206626000 2601432.877 = 45.03 +44.50 - 79.43 = 45.03 = 44.50 = 79.43 = 10.1 45 Days 45 Days 79 Days 10 Days + Accent Group Limited (2021) Accent Group Limited (2022) Ridley Corporation Limited (2021) Inventory Days = Inventory / Average Daily Cost of Goods Sold Accounts Receivable Days= Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) Inventory Days = Inventory / Average Daily Cost of Goods Sold Accounts Receivable Days = Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) Inventory Days = Inventory/Average Daily Cost of Goods Sold Accounts Receivable Days = Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) = 216881000 / 1164600 = 49032000/ 2713991.781 = 186.23 + 18.07 - 128.32 = 149446000 / 1164600 = 128.32 = 241631000/ 1383539.726 = 47303000/ 3088972.603 = 143148000/ 1383539.726 = 174.65 + 15.31 - 103.47 = 81947000/ 2325189.041 = 111316000/ 2541695.89 169752000/ 2325189.041 186.23 = 35.24 + 43.80- 73.01 = 18.07 = 75.98 = 174.65 = 15.31 = 103.47 = 86.49 = 35.24 = 43.80 = 73.01 = 6.03 186 Days 18 Days 128 Days 76 Days 175 Days 15 Days 103 Days 86 Days 35 Days 44 Days 73 Days 6 Days Ridley Corporation Limited (2022) Inventory Days = Inventory / Average Daily Cost of Goods Sold Accounts Receivable Days = Accounts Receivable / Average Daily Sales Accounts Payable Days = Accounts Payable/ Average Daily Cost of Goods Sold Cash Conversion Cycle (CCC) = 117131000/ 2601432.877 = 127889000/ 2874208.219 206626000 2601432.877 = 45.03 +44.50 - 79.43 = 45.03 = 44.50 = 79.43 = 10.1 45 Days 45 Days 79 Days 10 Days