Compute Cash Conversion Cycle for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions HAL SLB Total revenue $24,310 $33,130 Cost of sales and services 21,324 28,793 Average accounts receivable 5,450 8,298 Average inventory 3,027 4,343 Average accounts payable 3,101 10,445 a. Compute the following measures for both companies. 1. AR Turnover and days sales outstanding (DSO) Note: 1. Select the appropriate numerator and denominator used to compute AR turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AR turnover. Company Numerator Denominator AR turnover Answer Answer HAL Answer Answer SLB Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute DSO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DSO. Company Numerator Denominator DSO Answer Answer HAL Answer Answer SLB Answer Answer 2. Inventory Turnover and days inventory outstanding (DIO) Note: 1. Select the appropriate numerator and denominator used to compute inventory turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute inventory turnover Company Numerator Denominator Inventory turnover Answer Answer HAL Answer Answer SLB Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute DIO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DIO. Company Numerator Denominator DIO Answer Answer HAL Answer Answer SLB Answer Answer 3. AP Turnover and days payable outstanding (DPO) Note: 1. Select the appropriate numerator and denominator used to compute AP turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AP turnover. Company Numerator Denominator AP turnover Answer Answer HAL Answer Answer SLB Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute DPO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DPO. Company Numerator Denominator DPO Answer Answer HAL Answer Answer SLB Answer Answer 4. Cash conversion cycle (CCC) Cash Conversion Company DSO DIO DPO Cycle HAL SLB Question Company b. Which company better manages its accounts receivable? Answer c. Which company uses inventory more efficiently? Answer d. Which company better manages its accounts payable? Answer

Compute Cash Conversion Cycle for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions HAL SLB Total revenue $24,310 $33,130 Cost of sales and services 21,324 28,793 Average accounts receivable 5,450 8,298 Average inventory 3,027 4,343 Average accounts payable 3,101 10,445 a. Compute the following measures for both companies. 1. AR Turnover and days sales outstanding (DSO) Note: 1. Select the appropriate numerator and denominator used to compute AR turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AR turnover. Company Numerator Denominator AR turnover Answer Answer HAL Answer Answer SLB Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute DSO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DSO. Company Numerator Denominator DSO Answer Answer HAL Answer Answer SLB Answer Answer 2. Inventory Turnover and days inventory outstanding (DIO) Note: 1. Select the appropriate numerator and denominator used to compute inventory turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute inventory turnover Company Numerator Denominator Inventory turnover Answer Answer HAL Answer Answer SLB Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute DIO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DIO. Company Numerator Denominator DIO Answer Answer HAL Answer Answer SLB Answer Answer 3. AP Turnover and days payable outstanding (DPO) Note: 1. Select the appropriate numerator and denominator used to compute AP turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AP turnover. Company Numerator Denominator AP turnover Answer Answer HAL Answer Answer SLB Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute DPO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DPO. Company Numerator Denominator DPO Answer Answer HAL Answer Answer SLB Answer Answer 4. Cash conversion cycle (CCC) Cash Conversion Company DSO DIO DPO Cycle HAL SLB Question Company b. Which company better manages its accounts receivable? Answer c. Which company uses inventory more efficiently? Answer d. Which company better manages its accounts payable? Answer

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2PB

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Compute Cash Conversion Cycle for Competing Firms

Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements.

$ millions	HAL	SLB
Total revenue	$24,310	$33,130
Cost of sales and services	21,324	28,793
Average accounts receivable	5,450	8,298
Average inventory	3,027	4,343
Average accounts payable	3,101	10,445

a. Compute the following measures for both companies.

1. AR Turnover and days sales outstanding (DSO)

Note: 1. Select the appropriate numerator and denominator used to compute AR turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AR turnover.

Company	Numerator	Denominator
	Answer	Answer
HAL	Answer	Answer
SLB	Answer	Answer

Note: 1. Select the appropriate numerator and denominator used to compute DSO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DSO.

Company	Numerator	Denominator
	Answer	Answer
HAL	Answer	Answer
SLB	Answer	Answer

2. Inventory Turnover and days inventory outstanding (DIO)

Note: 1. Select the appropriate numerator and denominator used to compute inventory turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute inventory turnover

Company	Numerator	Denominator
	Answer	Answer
HAL	Answer	Answer
SLB	Answer	Answer

Note: 1. Select the appropriate numerator and denominator used to compute DIO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DIO.

Company	Numerator	Denominator
	Answer	Answer
HAL	Answer	Answer
SLB	Answer	Answer

3. AP Turnover and days payable outstanding (DPO)

Note: 1. Select the appropriate numerator and denominator used to compute AP turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AP turnover.

Company	Numerator	Denominator
	Answer	Answer
HAL	Answer	Answer
SLB	Answer	Answer

Note: 1. Select the appropriate numerator and denominator used to compute DPO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DPO.

Company	Numerator	Denominator
	Answer	Answer
HAL	Answer	Answer
SLB	Answer	Answer

4. Cash conversion cycle (CCC)

				Cash
				Conversion
Company	DSO	DIO	DPO	Cycle
HAL
SLB

Question	Company
b. Which company better manages its accounts receivable?	Answer
c. Which company uses inventory more efficiently?	Answer
d. Which company better manages its accounts payable?	Answer

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