Question

Please show work in Excel and state the other company (competitor)

Calculate the CCC for your selected company and for one of your company's competitors. (Note: You can find a list of competitors to choose from in the "Competitors" tab within Yahoo! Finance.) Use the most recent fiscal year financial statements to calculate the different components of the CCC and its overall value. The components of the CCC are:

Days Payable Outstanding (DPO)

Days Sales Outstanding (DSO)

Days Inventory Outstanding (DIO)

Present your findings in a table in Excel comparing your selected company to the competitors. Show a side-by-side comparison of the DPO, DSO, DIO, and overall CCC.

Answer 1

The company we have chosen is "Walmart" and the competitor as "Costco Wholesale corp" and used the most recent annual information,

Please find below screenshots of excel tables:

In this we can clearly see that the Walmart has better cash conversion cycle of 3.8 than its competitor Costco which has CCC of 6.4, Although Costco is managing it receivables and inventory more efficiently but they are not getting enough credit period signified by low DPO of 28.3

Similarly Walmart seems less efficient when it comes to DIO and DSO in comparison with Costco.

Shown below is the Turnover ratios for Walmart and Costco and the formula and math related to the above table:

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For further clarifications and reading I am also attaching the income statement and Balance sheet of Walmart.