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\"balance sheet on tie website. Make suie yuu ait u statement\", annual (not quarterly) data. or \"cash flow\" 1. Complete the following table for these two companies: Total sales revenue Inventory COGS (or cost of revenue) Accounts payable (AP) Accounts receivable (AR) Total profit (net income) Total asset In Millions of USDs Firm name: Apple 229,234.00* 4855.00* 41,048.00* 49,049.00* 17,874.00* 48,351.00 375,319.00* Firm name: Microsoft 89,950* 2,181.00* 34,261.00* 7,390.00* 22,431.00* 21,204.00* 250,312.00* 2. Evaluate the cash to cash flow time measures for the two companies. Which company is better? Firm name: Apple Firm name: Microsoft AP flow time Inventory flow time AR flow time Cash2cash flow time

Solution

2.

All figures in days

AP flow time = (accounts payables / cost of goods sold) *365

AR flow time = (accounts receivables / revenue) *365

Inventory flow time = (inventory / cost of goods sold) *365

Cash to cash flow time = AR flow time+inventory flow time - AP flow time

Apple has a better efficieny in managing its cash as the cash conversion cycle is negative which means the company receives payments faster than it pays to its suppliers.

3) Return on assets = net income / total assets

Apple is better in terms of ROA also and yes the result is consistent. This is becuase Apple is manging its assets well in generating cash and thus is able to use this cash to generate more profits.

4) To employ balance scorecard to assess the performance of the two companies, we would require further information apart from the given above and these would include the customer satisfaction information to assess the customer perspective, the technological, human, and infrastructure capacities of the company to aasess the breakthrough performance.

4)

	Apple	Microsoft
AP flow time	126.9	78.7
Inventory flow time	12.6	23.2
AR flow time	28.5	91.0
Cash to cash flow time	-85.9	35.5