Corporate Finance

Running head: CORPORATE FINANCE
Corporate Finance
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1CORPORATE FINANCE
Table of Contents
Part 1: Company Perspective.....................................................................................................2
Question a:.............................................................................................................................2
Question b:.............................................................................................................................3
Question c:.............................................................................................................................3
Requirement i:....................................................................................................................3
Requirement ii:...................................................................................................................3
Requirement iii:..................................................................................................................4
Part 2: Capital Budgeting:..........................................................................................................4
Question a:.............................................................................................................................4
Question b:.............................................................................................................................5
Question c:.............................................................................................................................5
Question d:.............................................................................................................................6
Question e:.............................................................................................................................6
References:.................................................................................................................................7

2CORPORATE FINANCE
Part 1: Company Perspective
Question a:
Table 1: Cash conversion cycle of Apple and Samsung for the years 2017 and 2018
(Source: S2.q4cdn.com 2019: Samsung global 2019)
Cash conversion cycle assists in measuring the efficiency of an organisation for
management of its working capital and generation of cash flows (Nobanee and Al Hajjar
2014). Apple’s cash conversion cycle has increased negatively from 2017 to 2018, while
Samsung’s cash conversion cycle has increased positively in the same period. This is because
the retail operation of Apple is sizeable and thus, it receives cash or card payment for
majority of its sales. On the other hand, Samsung relies on its vendors for sales due to which
higher credit period is needed. Moreover, the inventory turnover of Apple seems to be
quicker owing to its sound demand policy, while for Samsung, the manufacturing operation is
less sizeable (Forbes.com 2019). Furthermore, the negotiation terms of Apple with vendors