You have the following data in relation to a large supermarket business: 31/12/202031/12/2019 £million £million Inventories 900 775 Trade 687.5 617.5 receivables Cash 525 562.5 Total current 2,112.5 1,955 assets Trade payables 2,800 2,625 Total current 2,800 2,625 liabilities 31/12/202031/12/2019 £million £million Revenue 16,350 15,050 Cost of Sales 14,793.25 13,800 Operating Profit 962.5 945 Your task: (a) Calculate the operating cash cycle in days for the year ending 31st December 2020. (b) Comment on your findings and explain whether this is typical for this type of business and why this is the case.

Question

Hi, I need help with this. It is just for practice for myself

You have the following data in relation to a large supermarket business:
31/12/202031/12/2019
£million
£million
Inventories
900
775
Trade
687.5
617.5
receivables
Cash
525
562.5
Total current
2,112.5
1,955
assets
Trade payables
2,800
2,625
Total current
2,800
2,625
liabilities
31/12/202031/12/2019
£million
£million
Revenue
16,350
15,050
Cost of Sales
14,793.25
13,800
Operating Profit
962.5
945
Your task:
(a) Calculate the operating cash cycle in days for the year ending 31st December 2020.
(b) Comment on your findings and explain whether this is typical for this type of business and why this is the case.
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Transcribed Image Text

You have the following data in relation to a large supermarket business: 31/12/202031/12/2019 £million £million Inventories 900 775 Trade 687.5 617.5 receivables Cash 525 562.5 Total current 2,112.5 1,955 assets Trade payables 2,800 2,625 Total current 2,800 2,625 liabilities 31/12/202031/12/2019 £million £million Revenue 16,350 15,050 Cost of Sales 14,793.25 13,800 Operating Profit 962.5 945 Your task: (a) Calculate the operating cash cycle in days for the year ending 31st December 2020. (b) Comment on your findings and explain whether this is typical for this type of business and why this is the case.

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