1. Assume that next year Billings Products expects to have $2,530 in inventory at the beginning of the year and $2,805 at the end of the year. Assume also that accounts receivable are expected to be reduced slightly during the year, from $7,109 to $7,000, and that accounts payable will grow from $3,500 to $3,950. During the year, net sales are expected to total $29,000 and cost of goods to total $22,800. Assume that the business of Billings is usually steady during the year (i.e. non cyclical)

Calculate Billings expected Inventory Turnover, Receivables Turnover, and Payables Turnover. With those results, calculate the companys expected Inventory Period, Receivables Period, and Payables Period. What do those numbers tell us?

Calculate the companys operating cycle and its cash cycle

2. Assume that a new more aggressive management team takes over Billings at the beginning of the year and plans to increase Receivables Turnover and Inventory Turnover by 10%, and at the same time decrease the Payables Turnover by 10%. If the new management is successful, calculate the companys new operating cycle and cash cycle? Why would they want to make these changes?

3. (10 points) What risks are associated with the new strategy set forth in Question 2? How would implementing the new strategy affect the day-to-day work of the following: Credit manager, marketing manager, purchasing manager, and payables manager.