A Cash Conversion Cycle Approach to Liquidity Analysis: A Case Study of SHOPPERS STOP

Authors

  • Dr. S.K. Khatik Professor and Head Department of Commerce, Dean, Faculty of Commerce and Chairman, Board of Studies, Barkatullah University, Bhopal
  • Dr. Amit Kr Nag Assistant Professor, Department of Commerce, The Bhopal School Of Social Sciences. (BSSS), Bhopal

Keywords:

Liquidity, Cash Conversion Cycle, Days Inventory Outstanding, Days Sales Outstanding and Days Payable Outstanding.

Abstract

Cash Conversion Cycle reflects the time interval between the actual expenditures incurred by a firm in procurement of productive resources and the ultimate recovery of cash receipts from the sales of the product. Therefore it helps to identify the time period required by a firm to convert cash disbursements into cash receipts from its regular course of operations.  Since the liquidity of the company depends on the relationship between inflows of cash and required outflows of cash that occur over time. An attempt has been made to study the effect of Cash Conversion Cycle on the liquidity of SHOPPERS STOP. The study tries to examine the impact of different variables of Cash conversion Cycle such as days inventory outstanding, days sales outstanding and days payable outstanding on company’s liquidity position. The data was collected from the annual reports of SHOPPERS STOP covering the period of five years starting from 2008-09 to 2012-2013 and the data analysis was conducted by using one sample t-test considering Cash Conversion Cycle as an independent variable.

References

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Published

2014-08-31

Issue

Vol. 3 No. 9 (2014): AUGUST 2014

Section

Articles

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