Using the Ratios and Information Given Below for PepCo Company

question 28

Essay

Using the ratios and information given below for PepCo Company, analyze the short-term liquidity of the firm. $\begin{array}{lll}&2015&2014\\\text { Current ratio } & .86 & .80 \\\text { Quick ratio } & .65 & .61 \\\text { Cash flow liquidity ratio } & .69 & .62\\\text { Average collection period } & 32 \text { days } & \text { 30 days } \\\text { Days inventory held } & 74 \text { days } & 74 \text { days } \\\text { Days payable outstanding } & 157 \text { days } & 163 \text { days }\\\text { Cash conversion cycle } & \text { (51 days) } & \text { (59 days) } \\\text { Cash flow from operations (in millions) } & \$ 2,508 & \$ 2,232 \\\text { Net sales (in millions) } & \$ 13,957 & \$ 13,074\end{array}$

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Definitions:

Organizational Cultures

The collective behaviors, customs, and ways of thinking that are unique to each organization and that shape its members' actions and interactions.

Ethical Behavior

Ethical Behavior involves acting in ways consistent with societal norms and values, including honesty, integrity, fairness, and respect.

Outplacement Firm

A service provider that assists laid-off employees in finding new jobs, often employed by the former employer to help reduce the impact of layoffs.

Concerned

A state of being worried or anxious about something.