The following table reports the operating cycle, cash conversion cycle, and current ratio for three apparel retailers all having year-ends
All three companies follow the industry practice of including occupancy costs in cost of goods sold.
1. Do any of these companies appear to have a short-term liquidity problem?
2. How does the industry practice of including occupancy costs in cost of goods sold affect the statistics presented in the above table?
3. What is the most likely explanation for Ross Stores' 2.2 days accounts receivable outstanding?
4. What is the most likely explanation for 0.0 days accounts receivable outstanding at Aeropostale and The GAP?
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