Module 8 demonstrates how a firm’s operations create a pattern of activity resulting in cash inflows and outflows. For analytical purposes, we separate activities generating inflows and outflows of resources into an Operating Cycle and a Cash Cycle. The timing and volume of payments flowing out (uses of cash) in relation to resources flowing in are closely related to the financial health and competitiveness of a firm. In this discussion, you demonstrate how you can use this knowledge to get ahead professionally.
Background
You have moved on from J&B, but the financial skills developed at J&B allowed you to move into independent consulting. Your clients rely on you to suggest operational improvements. With a number of other prominent consultants, you are invited to a conference to consider how firms can improve short-term solvency. The conference focuses on innovation, best practices, and risk management. Each invited consultant has been asked to outline the operations of a firm listed on a major exchange to demonstrate how this firm could improve its short-term financial policy and planning by incorporating innovation, best practices, and risk management into its short-term planning in order to better support long-term competitiveness. This opportunity will allow you to “cash in” as you gain additional professional connections and clients.
Initial Post
Visit the Securities and Exchange Commission’s (SEC’s) Edgar Website https://www.sec.gov/edgar.
Download the latest annual (“10-K”) report for a listed firm of your choice. Use the financial statements in the report to calculate the firm’s Operating Cycle and Cash Cycle (a model spreadsheet to collect required data is found below). You can also download this information in an Excel Spreadsheet .Download Excel Spreadsheet. (see attachment).
Present an analysis of a firm of your choice, structuring your response around the following:
Describe the firm, detailing its origin, industry, and operating features distinguishing it from competitors.
Calculate and evaluate the entity’s operating and cash cycles.
Suggest measures appropriate to this firm and industry to improve this firm’s cash flow.
Please Rubric.
Reference
Chronical Contributor (2021). The Difference Between Operating & Cash Conversion Cycles. Small Business Chronicle. Retrieved from: https://smallbusiness.chron.com/difference-between-operating-cash-conversion-cycles-24738.html
Cole-Ingait, P. (n.d.). Operating Capital & Its Importance. Small Business Chronicle. Retrieved from: https://smallbusiness.chron.com/operating-capital-its-importance-80620.html
