A company has the following ratios: Current ratio - .85 Inventory to Sales Conversion Period 180 days Sales to Cash Conversion Period 75 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 $1,000,000 of equity and $120,000 in retained earnings at the end of the year. Sales in the most recent year were $2,500,000. 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? What changes can managing make that will have the greatest impact on ROI?