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Christie Corporation is trying to determine the effect of its inventory turnover ratio and days salesoutstanding ( DSO ) on its cash flow cycle. Christie's

Christie Corporation is trying to determine the effect of its inventory turnover ratio and days salesoutstanding (DSO) on its cash flow cycle. Christie's 2012 sales (all on credit) were $150,000; its cost of goods sold is 80% of sales; and it earned a net profit of 6%, or $9,000. It turned over its inventory 6 times during the year, and its DSO was 36.5 days. The firm had fixed assets totaling $35,000. Christie's payables deferral period is 40 days.

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