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(A) Suppose you are comparing two companies that are in the same line of business. Company C has an operating cycle of 40 days, and Company D has an operating cycle of 60 days. Company C has a current ratio of 3.0 and Company D has a current ratio of 2.5 . Comment on the liquidity of the two companies. Which company has more risk of not satisfying its near- term obligation? Why?(3 marks)

(B) Describe the cash conversion cycle. How can a financial manager use knowledge of the cash conversion cycle to better manage the working capital of a firm?(3 marks)

(C)A company produce computers and it takes 73 days to convert raw materials to computers and then to sell them, another 24 days to collect on receivables. However 30 days normally elapse between receipts of raw materials and payment for them. How many days would be cash conversion period?(4 marks)

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