(Solution) - Refer to CVS s annual report in the Supplement to Chapter -(2025 Original AI-Free Solution)

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Refer to CVS?s annual report in the Supplement to Chapter 5 and to Figure and in this chapter. Assume that at any one time CVS has about 76 days of merchandise inventory available for sale, takes about 18 days to collect its receivables, and takes about 40 days to pay its creditors. Write a memorandum to your instructor briefly describing CVS?s operating cycle and financing period. The memorandum should identify the most common transactions in CVS?s operating cycle. It should also refer to the importance of accounts receivable, accounts payable, and merchandise inventory in CVS?s financial statements. Complete the memorandum by explaining why the operating cycle and financing period are favorable to the company.