Course Project - Working Capital Management
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 Cyclefor this analysis.
Selected company for this assignment: Target Corporation (TGT)
Submitting Word doc and Excel calculations. Show calculation in excel and paste onto word but still submit the excel.
1. Conceptual Explanation of CCC
a) Define the CCC and explain its use and importance.
i. What's the definition?
ii. What it means
iii. How does it impact how a company decide to offer credit to customers?
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:
a) Days Payable Outstanding (DPO)
b) Days Sales Outstanding (DSO)
c) 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.
a) 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?
i. Explain the position the company is in
ii. How does the companies CCC look
iii. Does it need to be changed
iv. Do a peer comparison side by side
4. Paper Mechanics should be as follows:
b) You should submit both a Word document and an Excel spreadsheet
c) 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.