Case of Unidentified Companies - Free Essay Example

Sample details Pages: 1 Words: 256 Downloads: 8 Date added: 2017/09/19 Category Finance Essay Type Argumentative essay Did you like this example? We decided to group all the retail companies together by understanding that a retail company will have a relatively low collection period and then break them down further based upon our knowledge and research of industry averages. We believe that the Department store is represented by column K. The first aspect that caught our attention was the fact that there was a very large amount of inventory, which makes sense because a department store will need to have a continuous flow of inventory in order to make sure the most current goods are being represented on the shelf, while the older items get cycled out. Also, column K had a relatively low inventory turnover due to the fact that it will only completely sell its inventory a few times a year. This will be sold to either the customers of the store or to different resellers, who will buy the goods at a discounted price and sell them for a cheaper price to customers. Another aspect of column K is the fact that the collection period is 16 days. This is due to the fact that they issue their own charge card, which is most likely billed at the end of every month. So averaging the people who pay with cash or their debit card with the people who use the charge card or their credit card will result in a collection period of 16 days. After doing some research we concluded that the online book company would have the balance sheet and financial data of column A. Don’t waste time! Our writers will create an original "Case of Unidentified Companies" essay for you Create order