ASSIGNMENT | How can Lowe’s reduce its cash conversion cycle?

How can Lowe\’s reduce its cash conversion cycle? It’s important for an investor to determine his or her portfolio beta. If the portfolio beta exceeds 1, the portfolio is likely to be more volatile than the overall stock market. If the portfolio beta is less than 1, the portfolio is likely to be less volatile than the overall stock market. If the portfolio beta equals 1, the portfolio is likely to be as volatile as the overall stock market. It’s important for investors to create diversified portfolios

SAMPLE SOLUTION

Cash conversion cycle is a metric that expresses the time taken by a Company to have its resources converted to cash flow. Its components include the outstanding day’s inventory, outstanding day’s sales as well as the day’s payable outstanding. The amount of cash that a company has dictates both the short term and long term operations of the business (Chang, 2018). It also dictates how long a company will take to have its creditors fully paid. So how can Lowe reduce its cash conversion cycle?
The first strategy that the company can use is to monitor the timing, amount of cash inflows as well as outflows in its cash flow management strategy. At no point should the company have more cash outflows as compared to cash inflows since that will amount to losses (Mun & Jang, 2015). Lowe has to ensure that expenses incurred do…