Assignment is attached.
Working Capital Case Study
a. Select a publicly held company that has an inventory. Obtain at least two years of financial information pertaining to the company from its most recent annual report (10-K). Then, use the information contained in the annual report to calculate the following for your selected organization: ((Wal-Mart) is the selected organization)
5) Operating cycle
Be sure to show your calculations in your analysis.
b. Based on your calculations and other research, prepare an analysis of your selected company's (Wal-Mart) working capital in which you address the following items:
1) Make recommendations for financial decisions that the organization could pursue based on its working capital situation.
Operating Cycle is defined as the time duration, which the firm requires to manufacture and sell the product and collect cash. Thus operating cycle refers to the acquisition of resources, conversion of raw materials into work-in-process into finished goods, conversion of finished goods into sales and collection of sales. Larger is the operating cycle, larger will be the investment in current assets.
In practice, firms are acquiring resources on credit. To that extent, firm's need to raise working finance is reduced. Net Operating Cycle is used for the difference between operating cycle (or gross ...
This discusses the Working capital and operating cycle analysis for Wal-Mart