Question: SECTION C (Total 55 Marks) QUESTION 1 Selected information for Company A and B in year 2020 are given below: In RM Company A Company

SECTION C (Total 55 Marks) QUESTION 1 Selected information for Company

SECTION C (Total 55 Marks) QUESTION 1 Selected information for Company A and B in year 2020 are given below: In RM Company A Company B Inventory 3,000 5,000 Sales 60,000 50,000 Accounts Receivable 5,000 6,000 Accounts Payable 4.000 3,000 COGS 54,000 33,000 Cash 12,000 10,000 Share Capital 190,000 135,000 Long-term loan 13,000 55,000 Required: a. Calculate cash conversion cycle for Company A and B. (5 marks) b. Comment on the liquidity position of Company A and B based on the cash conversion cycle computed in part (a). (10 marks) c. Is it possible to have negative cash conversion cycle? Explain and illustrate using a diagram (10 marks) (Total: 25 marks)

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