Introduction to Corporate Finance

Ross et al.: Fundamentals

of Corporate Finance, Sixth

Edition, Alternate Edition

VII. Short−Term Financial

Planning and Management

19. Short−Term Finance
    and Planning

© The McGraw−Hill^699

Companies, 2002

1. Cash and Operating Cycles Find the most recent financial statements for
   Dell Computer (DELL) and Boeing (BA). Calculate the cash and operating cy-
   cle for each company for the most recent year. Are the numbers similar for these
   companies? Why or why not?


2. Cash and Operating Cycles Download the most recent quarterly financial
   statements for Kmart (KM). Calculate the operating and cash cycle for Kmart
   over each of the last four quarters. Comment on any changes in the operating or
   cash cycle over this period.

19.1 Cash Cycle Go to http://www.marketguide.com. You will need to find the most re-

cent annual income statement and two most recent balance sheets for American

Home Products (AHP) and Homestake Mining (HM). Both companies are in the

S&P 500 Index. AHP is involved in pharmaceuticals and consumer health care,

while Homestake Mining is a leading gold mining company. Calculate the cash

cycle for each company and comment on any similarities or differences.

19.2 Operating Cycle Using the information you gathered in the previous problem,

calculate the operating cycle for each company. What are the similarities or differ-

ences? Is this what you would expect from companies in each of these industries?

Spreadsheet Templates19–5, 19–6, 19–14

S&P Problems

672 PART SEVEN Short-Term Financial Planning and Management

What’s On

the Web?

A B C D

E F G H

321

654

987

112110

1143

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)
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ThPee friods:
ormal entered in cell B 10 is = NPER: not
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a percentage.
$$ 5020 ,.1^5 , 0002000
6. (^116255)