Problem
Using the following selected financials from Barnes & Noble's 10-K, calculate the cash conversation cycle for fiscal years 2004 and 2005. Show all work used to arrive at the answer.
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Fiscal Year 2005
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Fiscal Year 2004
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Fiscal Year 2003
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Revenue
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$5,103,004
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$4,873,595
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$4,372,177
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COGS
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$3,533,009
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$3,386,619
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$3,060,462
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Inventory
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$1,274,578
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$1,289,807
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$1,395,872
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A/R
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$91,501
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$50,966
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$66.948
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A/P
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$745,073
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$639,939
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$710,907
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Days
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Fiscal Year 2005
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Fiscal Year 2004
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DSO
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DII
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DPO
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Cash Conversion Cycle
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- Looking at the trend between 2004 and 2005, has there been an improvement or worsening of the cash conversion cycle?
- Discuss how each component you calculated is contributing to the increase or decrease in the cash conversion cycle from 2004 to 2005.
Additional Information:
This question is basically belongs to the Finance as well as it describes about calculating cash conversion cycle and each of the components used for calculating cash conversion cycle.