| Course | FNCE 3001 Financial Management |
|---|---|
| Week | Week 7 |
| Paper type | Working capital memo |
| Length | About 600 words, 4 pages |
| Format | Memo, APA 7 citations |
| School | Walden University |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for FNCE 3001 Week 7
Memorandum
To: Chief Financial Officer, Juniper Peak Sports
From: Financial Analyst
Date: March 9, 2026
Re: Working capital and the cash conversion cycle, fiscal 2025 against fiscal 2024
Finding
Our cash conversion cycle, how many days pass from the time we pay a supplier to the time a customer pays us, rose from about 77 days in fiscal 2024 to about 88 days in fiscal 2025. Nearly all of the increase came from inventory sitting longer on our shelves. The longer cycle tied up roughly $1.55 million more in working capital, which explains much of the fall in our year-end cash.
The Three Day-Counts
The figures below come from the fiscal 2025 and fiscal 2024 annual statements, using year-end balances and a 365-day year.
Table 1
Day-Counts and Cash Conversion Cycle
| Measure | Formula | Fiscal 2025 | Fiscal 2024 | Change | |
|---|---|---|---|---|
| Days inventory outstanding | Inventory x 365 / cost of goods sold | 134.7 | 125.3 | +9.4 | |
| Days sales outstanding | Receivables x 365 / net sales | 10.0 | 8.9 | +1.1 | |
| Days payables outstanding | Payables x 365 / cost of goods sold | 57.2 | 57.1 | +0.1 | |
| Cash conversion cycle | Inventory days + receivable days − payable days | 87.5 | 77.1 | +10.4 | |
Inputs in thousands: inventory 18,600 and 15,800; receivables 2,300 and 1,900; payables 7,900 and 7,200; cost of goods sold 50,400 and 46,020; net sales 84,000 and 78,000.
Which Component Moved
Inventory days rose by 9.4. Inventory was up 17.7 percent on the year against a 9.5 percent rise in the cost of goods sold, so the average item now waits about 135 days to be sold. The cause, as the merchandising team has confirmed, is ski equipment and winter clothing left over from a short season. This is not a deliberate build ahead of a sales push; it is stock that missed its window.
Receivable days rose by 1.1, reflecting the larger school and club team-sales program, which bills on 30-day terms. The effect is small, and the program adds sales.
Payable days were unchanged. We are paying suppliers on the same schedule as last year. Stretching payables would shorten the cycle, but most of our suppliers offer a discount for payment within ten days, and giving that up would cost more than it saves (Brigham & Houston, 2022).
What the Days Cost in Dollars
One day's worth of inventory, at fiscal 2025 cost levels, is about $138,000. The 9.4 extra days therefore hold about $1.30 million. At fiscal 2025 sales, each day of receivables represents about $230,000, so the 1.1 extra days hold about $0.25 million. Together, about $1.55 million more of our cash was tied up in the operating cycle at year end than would have been at last year's pace. Hill et al. (2010) found that firms' working capital levels track their sales growth, operating cash flow and access to outside financing. A company of our size, with one bank relationship and a modest credit line, has less room than a large chain to carry a long cycle, so the extra $1.55 million matters more to us than the same figure would to a national retailer.
Recommendations
1. Clear the excess winter stock through an end-of-season sale and an outlet partner before June, accepting a lower margin on those items to release cash.
2. Tighten winter orders for next season, using this year's sell-through rates by product line.
3. Leave payables and the team-sales terms as they are.
If inventory days return to last year's level, the cycle would fall back to about 78 days and release about $1.3 million. Ross et al. (2022) note that the cycle is most useful tracked quarterly, and I suggest we report it each quarter to the leadership team.
References
Brigham, E. F., & Houston, J. F. (2022). Fundamentals of financial management (16th ed.). Cengage Learning.
Hill, M. D., Kelly, G. W., & Highfield, M. J. (2010). Net operating working capital behavior: A first look. Financial Management, 39(2), 783-805. https://doi.org/10.1111/j.1755-053X.2010.01092.x
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2022). Fundamentals of corporate finance (13th ed.). McGraw Hill.
Reading the FNCE 3001 Week 7 instructions
In Week 7 you write a memo to a manager measuring one company's working capital cycle. Open with the finding. Compute days inventory outstanding, days sales outstanding and days payables outstanding for two periods, with the figures and source behind each. Combine them into the cash conversion cycle and say whether it lengthened or shortened and by how many days. Explain which component moved and why, since different causes call for different responses. Convert the change in days into money using daily sales or daily cost of goods sold. Close with practical recommendations. Use a memo format with a subject line.
Inside the FNCE 3001 Week 7 example
The memo is addressed to the chief financial officer. Its first paragraph states the 10.4-day increase and the $1.55 million it represents. A table gives each day count, its formula and both years, with inputs listed beneath. The component section traces inventory days to leftover winter stock, links receivable days to team sales on 30-day terms and explains that payables were left alone because early-payment discounts are worth more, citing Brigham and Houston. A section converts days to dollars using daily cost of goods sold and daily sales, citing Hill and colleagues on why size matters. Recommendations cover clearing stock, tighter winter orders and quarterly tracking, citing Ross and colleagues.
Reading the FNCE 3001 Week 7 rubric
Working capital memos are graded on correct day counts and clear diagnosis. Each measure should show its inputs and formula, and the cycle should be computed correctly as inventory days plus receivable days minus payable days. The memo must name the component that moved and say why it moved at this company. Converting days into dollars makes the finding usable and is expected. Recommendations should address the cause identified; advising a company to stretch payables without weighing lost discounts, for example, shows shallow analysis. A memo that leads with its finding and stays within two pages meets the course's professional standard. A source line under the table is expected.
FNCE 3001 Week 7 help: mistakes that cost marks
Pull inventory, receivables, payables, sales and cost of goods sold for two years. Compute each day count with a 365-day year, basing inventory and payable days on cost of goods sold and receivable days on sales. Add the first two and subtract payables for the cycle. Compare the years and find the component that moved most. Ask why it moved; the notes or management discussion usually say. Then multiply the change in days by daily cost or daily sales to get dollars. Common errors are using sales for inventory days and listing numbers without a cause. Share the statements you are working from and we can model the memo. Keep the memo to one or two pages, and put the single most important number in the first two sentences.
Get a FNCE 3001 Week 7 example written to your instructions
A memo is only useful if the day-counts are yours, so the Week 7 request should carry the prompt, the rubric and whichever statements or case figures sit behind the assignment. The returned sample computes all three counts on those statements and reads the cycle against the prior period. No fee for a first memo, 24 to 48 hours.
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FNCE 3001 Week 7 questions, answered
Where can I find a free FNCE 3001 Week 7 sample paper?
The full working capital memo, table and recommendations are shown here, free of charge.
How much did the cash conversion cycle change in the FNCE 3001 Week 7 memo?
It lengthened from about 77 to 88 days, an increase of 10.4 days.
Which component drove the change?
Inventory days, which rose 9.4 because ski equipment and winter clothing were left over from a short season.
Why not stretch payables?
Most suppliers offer an early-payment discount, and giving it up would cost more than the cash saved.
How much cash do the extra days hold?
About $1.55 million: roughly $1.30 million in inventory and $0.25 million in receivables.