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Answer: Introduction This research is based on an examination of Adobe Inc.'s financial performance and value. The report includes a capital use study of fixed assets as well as a working capital analysis. This report delves into the company's working capital and how receivables, inventory, and payables are handled. Find Original Source of information: https://myassignmenthelp.com/free-samples/mbaa525-finance-theory/oracle-corporation-and-microsoft-corporation-file-A1D6558.html
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MBAA525Finance Theory Answer: Introduction ThisresearchisbasedonanexaminationofAdobeInc.'s financialperformanceandvalue.Thereportincludesa capitalusestudyoffixedassetsaswellasaworking capitalanalysis.Thisreportdelvesintothecompany's workingcapitalandhowreceivables,inventory,and payablesarehandled.OracleCorporation,Microsoft Corporation,IBM,SalesForce.com,andAutodeskInc. areamongAdobe'sprimary competitors. Discussion TheaccountreceivableofAdobeInc.wascontinuously increasingfromtheyear2016to2019.Butintheyear 2020accountreceivablesfall.Decreasingaccounts receivablesisbeneficialsinceitindicatesthatthefirm hasconvertedtheaccount receivableto cash.Asa result, it'sjustabalancesheetadjustmentwhereyoureduce receivablesandboostcash.Thecashandcash equivalentsweregrownbynearly30%overtheprevious year,accordingtothebalancesheet.Accountspayable, ontheotherhand,issteadilyexpanding.Account payablewas$88millionin2016,anditwillbe$306 millionin2020.APgrowsincomparisontotheprevious period,indicatingthatthecorporationispurchasing moreproductsorservicesoncreditratherthanpaying cash.AdobeInc.'sbalancesheetandincomestatement clearlydemonstratethatsaleswere$9634millionin 2019andclimbedto$11626millionin2020,withacash
balanceof$4177millionin2019and$5992millionin 2020. ForFinanceAssignmentHelpOnlineVisit: Myassignmenthelp.com Figure1.AccountreceivableandPayable Workingcapitalmanagementensuresthatthefirmcan coverday-to-dayrunningexpenditureswhilemaximizing theutilizationofitsfinancialresources.Workingcapital isutilizedtorunabusinessandsatisfyshort-term commitments.Itshowsthebusiness'sliquiditylevelsfor controllingcosts,anditincludesinventory,cash, accountsreceivable,andaccountspayable(Bankof America,2022). Ascomparedwithlastyear,theworkingcapitalof Adobeinc.hasincreased.Intheyear2020,theworking capitalwas-$1696millionwhichincreasedto$2634in theyear2020.Hereworkingcapitalisusedtomanage receivablesandcashbykeepingtrackofacompany's assetsandliabilitiesinordertoensurethatithas
enoughcashflowtocoveritsshort-termoperational expendituresanddebtcommitments. Figure2.WorkingcapitalofAdobe Inc. Workingcapital,accordingtotheresearch,guarantees thatthefirmhasadequatecashtomeetitscostsand debt.Thegoalforthisfirmwastoreducethecostof workingcapitalwhileincreasingthereturnonasset investments.Intheyear2020,theyreducedthecurrent liability. WhencomparingAdobeInc.'swakingcapitaltothatof MicrosoftCorporation,OracleCorporation, InternationalBusinessMachinesCorporation,Autodesk Inc.,andSalesForce.com,itwasdiscoveredthatAdobe Inc.isinthelead,followedbyMicrosoftCorporation andOracle Corporation.
Figure3.WorkingcapitalofAdobeInc.withall competitors. Zeroinventoryisabusinessapproachinwhich organizationsaimtohaveverylittleornostockonhand. Zeroinventoryseemstobemorecompetitive, adaptable,andcost-efficientthanretainingandstoring vastvolumesofinventory,mainlytothejust-in-time inventorymethodofquickturnaround (UnleashedSoftware,2018).AdobeInc., periods Autodesk Corporation,andSalesForce.comusethezero-inventory approach.Althoughthezero-inventorymethodisnot suitableforallfirms,itisidealformanyintoday's technologyworld. Tokeeptheircashflowincheck,severalbusinesses employacashconversioncycle.TheCCCdoesthisby trackingcash,orcapitalinvestment,asitpassesthrough inventoriesandaccountspayable(AP),revenuesand accountsreceivable(AR),andfinallycash (Quickcarfinance.co.uk,2022).Foritscashconversion cycleandzeroinventorytechnique,AdobeInc.has
differentinventories,receivables,andfixedassetsthan itsrivals,anditsinventory,receivables,andfixedassets havevariedovertime. Theuseofadobe'sfixedassetswasreducedin2020, althoughitremainedover8times.Thisoccurredasa resultofAdobeInc.'songoingexpansioninrevenueand fixedassets.Revenuewas$5854millionin2016,andit isexpectedtoriseto$12868millionin2020.Itindicates that$1.00spentinfixedassetscreates$8.48inrevenue forAdobeInc.overthecourse oftheyear. Figure4.Fixedassetsutilization WhenwecomparedAdobe MicrosoftCorporation, Inc.torivalssuchas Oracle Corporation, InternationalBusinessMachinesCorporation,Autodesk Inc.,andSalesForce.com,werevealedthatwhile MicrosoftCorporationearnsthemostrevenue,their fixedassetutilizationisonly1.49times.AdobeInc.,on theotherhand,hadthegreatestfixedassetutilization ofallrivalsat8.48times.ItshowsthatAdobeInc.has
madegreateruseofitsfixedassettoproduceincome thananyofits competitors. Figure5.FixedassetsutilizationofAdobeInc.withall competitors. Visitmyassignmenthelp.comforfinancialstatementanalysisassignmenthelp Conclusion Accordingtotheoverallresearch,AdobeInc.'saccount receivabledeclinedin2020,butitsaccountpayable climbed.Adobe Inc.had$2634millioninworkingcapital, whichwasmorethanInternationalBusinessMachines Corporation,AutodeskIncorporation,and SalesForce.com.The zero-inventory technique isusedby AdobeInc.,AutodeskCorporation,andSalesForce.com. Theyhavenoinventoryontheirbalancesheetasa resultofthisstrategy.AdobeInc.generated$8.48in revenue byinvesting$1.00 infixedassets.At8.48 times, AdobeInc.hadthehighestfixedassetutilizationofall competitors.
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