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Longer Cash-to-cash Cycles
Longer Cash-to-cash Cycles
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Longer Cash-to-cash Cycles
Cash-to-cash cycles refer to the amount of time that it takes a business to pay its suppliers to when and get cash from its customers. The cash-to-cash cycle is used to decide the amount of cash required to fund ongoing operations. It is a key factor in assessing financial requirements. To calculate the cash-to-cash cycle, one adds the days of sales outstanding to the days of inventory on hand and then subtracting the total days of outstanding payables. Longer cash-to-cash cycles have to do with the slow movement that comes as a result of inefficient procedures and fragmented technical results. For a company to calculate its cash-to-cash cycle, they need numerous financial statements, including the cost of goods sold and revenue from the income statements, amount receivable, amount payable, inventory at the start and end of the time period, and the number of days for the period under review, that is 90 days a quarter and 365 days for a year (Guragai, Hutchison, & Farris, 2019). When an organization or its management pays expenses too fast, has too much inventory or takes an extended amount of time to gather outstanding receivable accounts, its lengthens its cash-to-cash cycle. A long cash-to-cash cycle means that it takes longer to generate cash which can cause insolvency for small companies.
I choose to discuss longer cash-to-cash cycle as a high-level operational issue as it is something I have experienced with an organization I worked with in the past. The organization had a quick inventory turnover which increased the cash conversion cycle. This long cash-to-cash cycle took a toll on the organization’s overall efficiency. The company struggled with the moving across information among staff members efficiently. The systems put in place were inefficient and did not sync with the organizational culture. There were gaps in communication channels which made it difficult for employees to communicate.
As regards two potential solutions to longer cash-to-cash cycles as a higher-level operation issue for companies breaking down the order-to cash process and getting lean are some viable options. The company should take a moment to break down and fix its order-to-cash process. The first step would be to assess every step in their invoice process. This will help them get rid of unnecessary or redundant steps which might slow down the payment cycle. If possible, the organization should make use of digital payment and invoicing to get extra time from the process (Ahsan, Islam, Litan, & Huang, 2020). Just like with any improvement initiative, it is difficult for organizations to start out unless they know where they stand. The first step towards improving the current cash-to-cash cycle is to compute exactly how long it takes an organization on average to recoup its investments in services and products. If it takes more than 30 days, the company may have a chance to boost its cash flow. Getting lean would be helpful as lean companies tend to ship faster, deliver flexibly, and work through the inventory of their finished goods. Inventory tends to be easier to liquidate and turn into cash. If the company can conduct a thorough mapping of the end-to-end processes and fix their gaps, then they can make their operations as lean as possible. Additionally, organizations can also partner with both external and internal suppliers to incorporate processes and make replenishment as efficient and fast as possible. However, it is worth noting that irrespective of how lean an organization gets, they should always remember to incorporate safety calculations as backorders and stock-outs can damage an organization’s reputation and customer service.
References
Ahsan, K. M., Islam, M. S., Litan, M. M., & Huang, X. (2020). Cash conversion cycle connection with industrial productivity and volume. Globus An International Journal of Management & IT, 12(1), 66-70.
Guragai, B., Hutchison, P. D., & Farris, M. T. (2019). Cash-to-cash (C2C) length: Insights on present and future profitability and liquidity. In Advances in Management Accounting. Emerald Publishing Limited.
Long term profit maximization for Bartlett Milling Co
Long term profit maximization for Bartlett Milling Co
Bartlett Milling Co is among the wheat producing companies in the USA. Bartlett Milling Co operates in a free market as there exists various whet producing companies and so the lack of monopoly. Bartlett Milling Co experiences perfect and free competition. A free market is characterized by the policy that profit maximization is increasing the difference between revenue and production cost. Suppose Bartlett Milling Co can ensure it minimizes its production cost and maximize its revenue then the company is maximizing its profits. In other words, profit maximization is achieved suppose a Bartlett Milling Co’s revenue is greater than its production cost.
In the free market structure, Bartlett Milling Co can achieve product maximization in the long run by decreasing production cost or increasing the market price of its products. However, since there is perfect competition in the USA as it is a free market, Bartlett Milling Co would lose its market share suppose it increases its prices and so this is not a better strategy. The company, Bartlett Milling Co, has to reduce its production cost. One method Bartlett Milling Co can use in reducing its production cost is through having direct access to the market where middle men are minimized. The other way of profit maximization is through increased sales and this can be achieved by increasing its product distribution and enhancing marketing both in the USA and abroad. The increased distribution will lead to increased sales. Increased marketing will ensure customers are aware of the product and the advantages customers get from the product compared to competitors. This is a long term strategy.
Long Term Care And Support System
Long Term Care And Support System
Question1
The culture of caring is highly embraced by both the African-American and the Japanese cultures considering their deep concern for the elderly people. Though the African-American culture has provisions of care for the elderly, there, however, exists a cultural lag between the culture of caring, and the material necessities required to provide the needed care. The Japanese culture, on the other hand, has long-term care and support system, enabled by their cultural values, together with the prevailing health care system. This has helped maintain the tradition of providing long-term care at home.
Culture has always played an incredible and enormous in the provision of long-term care for the elderly members of the family in various ways. As such, culture facilitates the inclusion of family members and loved ones in caring for the older adults (Andrews & Boyle, 2008). This is in enabled by the fact that family members are participants in the informal social support networks, which are designed to nurture, and maintain the older adults, in community residences that are favorable to them. Moreover, all families are believed to posses culturally influenced patterns of responsibility aimed at taking care of the older members of the family, which varies across cultures (Andrews & Boyle, 2008). As such, in the Japanese culture, for instance, caregivers believe that caring for the older family members is a calling, hence demonstrating the influence culture has in taking care of these old family members.
Gender plays a crucial role in a given culture’s provision of care to older family members. In the African American culture, for instance, women in the family may be involved in taking care of the older family members, for example, their spouses older than them. The typical caregiver in this culture is mostly females who do not need to use formal health care services (Andrews & Boyle, 2008).
Question 2
Vignette 1
David Peterson enjoys some amount of informal support system from his caregivers, and especially from his daughter. The support includes the much-needed emotional support that Peterson requires, with regard to his current incapacitated state of affairs. In light of his his incapacitation, he further needs assistance in moving from his bed to the wheelchair and to the toilet. Other informal support system that Peterson requires includes having someone to run errands for him and accompanying him to a physician’s appointment whenever necessary (Olson & Massie, 2008). He also needs assistance in performing other activities of the day, for instance, household chores.
Peterson also requires formal services to aid his current condition, which includes the care provided while at home and away from the home. At home, he may require services, such as, a visiting nurse services to keep checking his health condition in his old age. He also needs a homemaker services, and health aid services. Away from home, Peterson requires the services provided in a physician’s office, and day care provision from a nursing facility. He may also require the services of a social worker who works as a liaison between him and those who provide him with both the informal and formal services necessary (Olson & Massie, 2008). The social worker thus acts as a formal service provider to Peterson.
With regard to this vignette, I believe that the older adult is not receiving the most optimal care for various reasons. Considering that Peterson needs assistance for any movement, even to the toilet, it, therefore, becomes mandatory that he has an ever present person to take care of his needs. This, however, is not the case considering that he lives alone and receives personal care for just a few hours in a day. His daughter, though providing him with regular informal care, is not always available, not to mention the fact that she does not have the capacity to provide the much-needed hands-on care to her father. With view of the above, I believe that Peterson requires somebody staying by his side always in order to provide him with optimal care.
References
Andrews, M. M., & Boyle, J. S. (2008). Transcultural concepts in nursing care. Philadelphia: Wolters Kluwer Health/Lippincott Williams & Wilkins.
Olson, L., & Massie C. M. (2008). Handbook of Long-Term Care Administration and Policy.CRC Press.