... (Source: Annual Financial Reports for 2001, 2002, 2003) Woolworths Ltd Coles Myer Ltd David Jones Ltd Year 2001 2002 2003 2001 2002 2003 2001 2002 2003 Working capital = Current assets -Current liabilities $million -570.9 -509.8 -623 1027.6 1090.2 1074.9 179.501 160.476 147.802 Current ratio = Current assets/ Current liabilities 0.81 0.84 0.81 1.35 1.37 1.35 1.89 1.77 1.69 * Acid-test ratio = Current assets - (property, plant, equipment + other)/ Current liabilities 0.74 0.77 0.73 1.33 1.35 1.35 1.84 1.72 1.66 Table 2. Working capital and liquidity ratios Woolworths Ltd Coles Myer Ltd David Jones Ltd Year 2001 2002 2003 2001 2002 2003 2001 2002 2003 Days Accounts Receivable or Days Debtors=(Year End Account Receivables/Total Sales)*365 Days 3.4 3.86 3.36 10.82 4.10 4.67 17.21 11.62 10.21 Days Inventory=(Year end inventories/Cost of Sales)*365 Days 39.42 35.68 33.31 59.65 52.79 52.78 106.91 97.02 97.12 Days Creditors or Days Payable=(Year end accounts payables and accruals /Cost of Sales)*365 Days 47.02 47.37 47.36 44.45 42.68 46.07 59.6 56.34 61.29 Days working capital cycle = Days Debtors + Days Inventory - Days Creditors Days -4.9 -7.83 -10.69 26.03 14.22 11.38 64.52 52.3 46.04 Table 3. Management Efficiency 3. Discussion Woolworths, Coles Myer, and David Jones are all cash sales businesses unlike companies who sell items on credit like oil drilling industries, which explains lower Days receivable ratio. In fact, David Jones, an upmarket department store, has reduced the ratio by 40% from 2001 to 2003 (Table 3). It puts aside provisions for doubtful debt because of its ...

See this essay or coursework document in full right now