Running head: Facebook Cash Conversion CycleCash Conversion
CycleFacebook Inc.NameInstitutionCourse1Facebook Cash Conversion
Cycle2IntroductionFacebook is a multinational technological company
based in the United States. It offerssocial media platforms where
individuals may interact bring the world to the gadget. The company
isdoing well financially and many investors are willing to pump in
their money in the company(Carter, 2013). The assignment will
discuss the cash conversion cycle to see how it is doing.
Thefinancial statements of financial year 2017 and 2018 will be
used for this assignment.Average inventoryThe average inventory
computes an estimate of stock during a specified time duration.The
estimate gives mean value of inventory in specified time period. In
finance, the averageinventory is computed by averaging beginning
and the ending inventory value in specifiedperiod. The intent to
use average inventory is because it cures the problem of
seasonality effect(Brigham & Houston, 2012).Average inventory=
(beginning inventory + ending inventory)Facebook Beginning
inventory in 2018= 0$Facebook Ending inventory in 2018= 0$Average
inventory= (0$+0$) =0$Inventory turnover rateInventory turnover
rate gives the number of times inventory are converted into sales.
Therate is obtained by first obtaining the average inventory
obtained by dividing sum of thebeginning inventory and the ending
inventory (Brigham & Houston …