Working Capital Management Analysis

This course project assignment gives you the opportunity to conduct a working capital management analysis of your chosen company and compare it to the industry. Specifically, we will work with the Cash Conversion Cycle for this analysis.

1. Conceptual Explanation of CCC

  1. Define the CCC and explain its use and importance.

2. Calculating the CCC

Calculate the CCC for your selected company and for one of your company’s competitors. (Note: You can find a list of competitors to choose from in the “Competitors” tab within Yahoo! Finance.) Use the most recent fiscal year financial statements to calculate the different components of the CCC and its overall value. The components of the CCC are:

  1. Days Payable Outstanding (DPO)
  2. Days Sales Outstanding (DSO)
  3. Days Inventory Outstanding (DIO)

Present your findings in a table in Excel comparing your selected company to the competitors. Show a side-by-side comparison of the DPO, DSO, DIO, and overall CCC.

3. Interpret your findings.

  1. Interpret the results of your analysis for you selected company. How do they compare to the competitor? Are any of the components noticeably better or worse? How could your company improve its CCC?

4. Paper Mechanics should be as follows:

  1. You should submit both a Word document and an Excel spreadsheet
  2. The organization and structure should be professional in nature. Use section headers, appropriate formatting, and make your paper flow logically and visually so the details are easy to follow and identify.
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