Cash Conversion Cycle

1. Introduction Increasingly, we are seeing many firms from various industries allowing their customers to pay on credit. This action will inevitably have a direct implication on the financial statements of these firms, in terms of accounts receivables, allowance for bad debt and uncollectible debt expense. This is especially so when customers are unable to repay their debts. In this paper, we will examine the 2008 financial statement of four companies in the retail industry, namely Courts Singapore Private Limited, Dairy Farm International Holdings Private Limited, Isetan Singapore Private Limited and OSIM International Limited. We will look at the amount of receivables of each company. In particular, their allowance for bad debts and bad debt expense in their financial statements. 2. About Courts Singapore Private Limited Headquartered in Singapore, Courts opened its first retail outlet in Singapore in 1974. It is one of the largest furniture, electronics and IT retailers in Southeast Asia. In line with its mission 'To be the most customer oriented, profit focused retailer making inspirational home products easily affordable ', Courts is committed to offering the best home products at the right prices. Courts started as a furniture retailer and subsequently started retailing electrical products in the 1980s and IT products in the late 1990s. Courts carries the largest selection of home furnishings, domestic appliances, home entertainment solutions and the latest digital technology. It also offers consumers a hassle-free in-house credit option, MAX Credit, to make consumers ' dream lifestyle more affordable. Courts currently has ten stores located island wide in Singapore. The company was listed in 1992 and became delisted in 2008. (Courts,2010) 3. Comparison Of Companies Under Investigation

GENERAL JOURNAL | DATE | DESCRIPTION | DEBIT | CREDIT | 2008 | | | | Dec | 31 | Dr Allowance for Bad Debt |

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