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Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cyele. Chastain's 2016

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Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cyele. Chastain's 2016 sales (all on eredit) were $242000; its cost of goods sold is 80% of sales; and it earned a net profit of 7\%\%, or s16940. It turned over its inventory 5 times during the year, end its DSO was 36.5 days. The firm had fored assots totaling $31000. Chastain's payables deferral period is 35 days. Assume 365 days in year for your calculations. The data has been collected in the Microsoft Excel Online file below, Open the spreadsheet and perform the required analysis to answer the questions bulow, Open spreodaheet a. Calculate Chastain's cash conversion cycle. Round your answer to two decimal places. Do not round intermediate calculations. (3) days b. Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and RoA. Round your answers to two decimal places. Do not round intermediate calculations. Total assets turnover ROA c. Suppose Chastain's managers belleve that the inventory turnover can be raised to 8.6 times. What would Chastain's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8.6 for 2016? Round your answers to two decimal places. Do not round intermediate calculations. Cash conversion cycle (3) days Total assets turnover ROA \begin{tabular}{lr} Sales & $242,000 \\ Cost of good sold \% & 80.00% \\ \hline Net profit margin & 7.00% \\ Original Inventory turnover ratio & 5.0 \\ DSO & 36.5 \\ Fixed assets & $31,000 \\ Payables deferral period & 35 \end{tabular} Calculate inventory conversion perio inventory Inventory conversion period (days) Formulas Calculate cash conversion cycle: Cash conversion cycle (days) \#N/A Calculate total assets turnover: Accounts receivable Total assets Total assets turnover Calculate return on assets: Net income Return on assets (ROA) \#N/A Revised inventory turnover ratio 8.6 Calculate inventory conversion period: Inventory Inventory conversion period (days) Calculate cash conversion cycle: Cash conversion cycle (days)

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