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Submitted By kifyantobe

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Words 1274

Pages 6

2. Cash conversion cycle expresses the length of time in days, that it takes a company to convert resource inputs into cash flows. The cash conversion cycle of the Moro Ltd compared to the average of the industry is poor because the company takes more than 35 days of the average of the industry to convert resource inputs into cash flows. Also, the cash conversion cycle of the Moro Ltd compared to that of the best performer in the industry is not good because the best performer in the industry takes few days (30 days) compared to that 40 days that Moro Ltd takes to convert resource inputs into cash flows.

3. Account Receivable Turnover measures how quickly/often the firm sells on credit as well as collecting debts. The firm which sells more quickly/often on credit performs better. Therefore the account receivable turnover of Moro Ltd compared to the average of the industry is poor because Moro Ltd sells on credit 20 times while the average of the industry sells on credit is 30 times. Also the Accounts Receivable Turnover of…...

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...Oracle Microsoft Notes: Comparison between the two companies' ratios Earning per share As given in the income statement $1.69 $2.73 Cannot compare due to a different amount of shares outstanding. Current ratio Current assets $39,174 = 2.76 $74,918.00 = 2.60 Current liabilities $14,192 $28,774.00 Gross Profit Ratio Gross profit amount $442 = 1.2% $1,637 = 2.3% Microsoft Sales (13940) - cost of revenue (15,577) Net Sales $35,622 $69,943 "Oracles Sales(24,031) -Operating Expenses (23,589) " Profit margin ratio Net income $8,457 = 23.7% $23,150 = 33.1% Profit ratio Net Sales $35,622 $69,943 Inventory Turnover Cost of goods sold $442 = 1.6 $1,637 1.6 Oracle 303+259/2 Average Inventory $281 $1,056 Microsoft 1372+740/2 Days in Inventory 365 days 365 = 232 365 = 235 Inventory turnover 1.6 days 1.6 days Receivable Turnover Ratio Net credit sales $6,579 = 0.99 $13,940 = 0.93 Average Net Receivables $6,628 $14,987 Average Collection Period 365 365 = 72 days 365 = 74 days Receivable Turnover Ratio 0.99 0.93 Assets Turnover Ratio Net Sales $6,579 = 0.10 $13,940 = 0.14 Average Total Assets $67,556 $97,408 Microsoft 108,704+ 86,113 /2 Oracle $ 73,535 + ...

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... 2010 | Dec 31, 2009 | Dec 31, 2008 | Turnover Ratios | | | | | | Inventory turnover | 8.35 | 8.68 | 8.07 | 4.03 | 11.02 | Receivables turnover | 4.77 | 4.95 | 4.64 | 3.41 | 5.39 | Payables turnover | 13.83 | 17.58 | 16.84 | 11.44 | 27.58 | Working capital turnover | 3.89 | 3.84 | 3.57 | 2.21 | 4.17 | Average No. of Days | | | | | | Average inventory processing period | 44 | 42 | 45 | 91 | 33 | Add: Average receivable collection period | 77 | 74 | 79 | 107 | 68 | Operating cycle | 120 | 116 | 124 | 197 | 101 | Less: Average payables payment period | 26 | 21 | 22 | 32 | 13 | Cash conversion cycle | 94 | 95 | 102 | 166 | 88 | Pfizer Inc., short-term (operating) activity ratios Ratio | Description | The company | Inventory turnover | An activity ratio calculated as revenue divided by inventory. | Pfizer Inc.'s inventory turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012 not reaching 2010 level. | Receivables turnover | An activity ratio equal to revenue divided by receivables. | Pfizer Inc.'s receivables turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012 not reaching 2010 level. | Payables turnover | An activity ratio calculated as revenue divided by payables. | Pfizer Inc.'s payables turnover increased from 2010 to 2011 but then declined significantly from 2011 to 2012. | Working capital turnover | An activity ratio calculated as revenue divided by working capital...

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