Money Oriented

CCC= inventory conversion period + receivables collection period – payable deferral period

2004 = 6.33 days + 79.2 days - 10.10 days = 75.43 days

2005 = 14.97 days + 131.7 days - 13.43 days = 133.24 days

2006 = 8.06 days + 124.7 days - 6.99 days = 125.77 days

2007 = 19.08 days + 362 days - 24.84 days = 356.24 days

2008 = 23.9 days + 330.5 days - 21.49 days = 332.91 days

Analysis:

At 2004, the needed time for production from the raw till sold in the market is 6.33 days with 79.2 days collectiong payment including maximum 10.10 days late payments over all year. The CCC this year result as 75.43 days. This mean the firm needs 75.43 days to collect the cash from sales, increases inventory returns and slows down the disbursement of cash.

At 2005, the needed time for production from the raw till sold in the market is 14.97 days with 131.7 days collectiong payment including maximum 13.43 days late payments over all year. The CCC this year result as 133.24 days. This mean the firm needs 133.24 days to collect the cash from sales, increases inventory returns and slows down the disbursement of cash. Compared to the previous year, this year the company needs more days in converting the goods to cash.

At 2006, the needed time for production from the raw till sold in the market is 8.06 days with 124.7 days collectiong payment including maximum 6.99 days late payments over all year. The CCC this year result as 125.77 days. This mean the firm needs 133.24 days to collect the cash from sales, increases inventory returns and slows down the disbursement of cash. Compared to the previous year, this year the company successes in reducing the days in converting the goods to cash. With this decreasing number, the company has success minimizing the working capital.

At 2007, the needed time for production from the raw till sold in the market is 19.08 days with 362 days collectiong payment including maximum 24.84 days late payments over all year. The CCC this year result as 356.24 days. This mean the firm needs 356.24 days or almost equal to a year to collect the cash from sales, increases inventory returns and slows down the disbursement of cash. Compared to the previous year, this year the company struggels in reducing the days in converting the goods to cash. With this big value of number, the company has suffered big troubles because can’t convert the goods into cash. the company used many portions of the debt to cover the payments for its production process and selling process in a year.

At 2008, the needed time for production from the raw till sold in the market is 23.9 days with 330.5 days collectiong payment including maximum 21.49 days late payments over all year. The CCC this year result as 332.91 days. This mean the firm needs 328.09 days to collect the cash from sales, increases inventory returns and slows down the disbursement of cash. Compared to the previous year, this year the company has been better in reducing the days in converting the goods to cash. but with this big value of number, the company has suffered big troubles because can’t convert the goods into cash. the company has to used many portions of the debt to cover the payments for its production process and selling process in a year.