Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $265000; its cost of goods sold is 80% of sales; and it earned a net profit of 4%, or $10600. It turned over its inventory 5 times during the year, and its DSO was 39 days. The firm had fixed assets totaling $43000. Chastain's payables deferral period is 45 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 below.

Open spreadsheet

Cash conversion cycle
Sales	$265,000
Cost of good sold %	80.00%
Net profit margin	4.00%
Original Inventory turnover ratio	5.0
DSO	39.0
Fixed assets	$43,000
Payables deferral period	45
Calculate inventory conversion period:			Formulas
Inventory			#N/A
Inventory conversion period (days)			#N/A
Calculate cash conversion cycle:
Cash conversion cycle (days)			#N/A
Calculate total assets turnover:
Accounts receivable			#N/A
Total assets			#N/A
Total assets turnover			#N/A
Calculate return on assets:
Net income			#N/A
Return on assets (ROA)			#N/A
Revised inventory turnover ratio	8.9
Calculate inventory conversion period:
Inventory			#N/A
Inventory conversion period (days)			#N/A
Calculate cash conversion cycle:
Cash conversion cycle (days)			#N/A
Calculate total assets turnover:
Accounts receivable			#N/A
Total assets			#N/A
Total assets turnover			#N/A
Calculate return on assets:
Net income			#N/A
Return on assets (ROA)			#N/A

1. Calculate Chastain's cash conversion cycle. Round your answer to two decimal places. Do not round intermediate calculations.

   days

2. 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		%

3. Suppose Chastain's managers believe that the inventory turnover can be raised to 8.9 times. What would Chastain's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8.9 for 2016? Round your answers to two decimal places. Do not round intermediate calculations.

   Cash conversion cycle		days
   Total assets turnover
   ROA		%