Zaharah Electronics Sdn. Bhd. is evaluating its cash conversion cycle of eight years, and has estimate each of its components as follows: Table 4: The Financial Determinants of Zaharah Sdn. Bhd. Cash Conversion Cycle for 2013 to 2020. [Jadual 4: Penentu Kewangan bagi Kitaran Penukaran Tunai Zaharah Sdn. Bhd. untuk 2013 hingga 2020.] Financial Determinants Years 2013 2014 2015 2016 2017 2018 2019 2020 Day of sales turnover (DSO) 49.64 days 38.69 days 33.14 days 26.57 days 26.66 days 32.01 days 32.74 days 35.59 days Days of sales of inventory (DSI) 7.10 days 7.17 days 5.79 days 3.99 days 9.22 days 7.75 days 4.20 days 4.65 days Days of payable outstanding (DPO) 62.34 days 64.92 days 62.07 days 72.87 days 75.79 days 79.41 days 81.46 days 79.41 days Cash conversion cycle (CC) S T U V W X Y Z (a) Based on the data in Table 4 above, estimate the value of cash conversion cycle for each year and complete the blue-coloured space of; S, T, U, V, W, X, Y and Z above. b)Based on the values of in (a) above, develop a graph of cash conversion cycle for the firm throughout the years. c) Based on the sketched graph in (b) above, explain on the trend of the firm’s cash conversion cycle during 2013 to 2020. d) Based on the trend of the firm’s cash conversion cycle in (c) above, conclude whether the firm is better managing its net working capital or not, and give a proper justification to support the conclusion.
Zaharah Electronics Sdn. Bhd. is evaluating its cash conversion cycle of eight years, and has estimate each of its components as follows:
Table 4: The Financial Determinants of Zaharah Sdn. Bhd. Cash Conversion Cycle for 2013 to 2020.
[Jadual 4: Penentu Kewangan bagi Kitaran Penukaran Tunai Zaharah Sdn. Bhd. untuk 2013 hingga 2020.]
|
Financial Determinants |
Years |
|||||||
|
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Day of sales turnover (DSO) |
49.64 days |
38.69 days |
33.14 days |
26.57 days |
26.66 days |
32.01 days |
32.74 days |
35.59 days |
|
Days of sales of inventory (DSI) |
7.10 days |
7.17 days |
5.79 days |
3.99 days |
9.22 days |
7.75 days |
4.20 days |
4.65 days |
|
Days of payable outstanding (DPO) |
62.34 days |
64.92 days |
62.07 days |
72.87 days |
75.79 days |
79.41 days |
81.46 days |
79.41 days |
|
Cash conversion cycle (CC) |
S |
T |
U |
V |
W |
X |
Y |
Z |
(a) Based on the data in Table 4 above, estimate the value of cash conversion cycle for each year and complete the blue-coloured space of; S, T, U, V, W, X, Y and Z above.
b)Based on the values of in (a) above, develop a graph of cash conversion cycle for the firm throughout the years.
c) Based on the sketched graph in (b) above, explain on the trend of the firm’s cash conversion cycle during 2013 to 2020.
d) Based on the trend of the firm’s cash conversion cycle in (c) above, conclude whether the firm is better managing its net
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