A company has the following ratios:

Current ratio - .85

Inventory to Sales Conversion Period - 180 days

Sales to Cash Conversion Period - 65 days

Purchases to Payments Conversion Period -7 days

The accountant also reports that the gross profit margin is 15% and the next profit margin is 3%.

Now you are being provided with this additional information on the company.

The company also has a bank line of credit that allows the company to borrow any shortfall it might have in cash.Interest on the loan is 10%. Assume the loan remained constant throughout the year.The company likes to keep no less than $25,000 in its bank account.Assume that outstanding accounts payable are all related to inventory purchases.

The company has $1,200,000 of equity and $140,000 in retained earnings at the end of the year.

Sales in the most recent year were $2,600,000.

Ignore income tax for purposes of this problem.

Build a balance sheet and income statement financial model.

What is the company's return on investment?

Bonus Points:What changes can managing make that will have the greatest impact on ROI?