Dana Dairy Products Key Ratios

		Industry Average		Actual 2009		Actual 2010
Current Ratio	1.3		1
Quick Ratio	0.8		0.75
Average Collection Period	23 days		30 days
Inventory Turnover	21.7		19
Debt Ratio	64.70%		50.00%
Times Interest Earned	4.8		5.5
Gross Profit Margin	13.60%		12.00%
Net Profit Margin	1.00%		0.50%
Return on total assets	2.90%		2.00%
Return on Equity	8.20%		4.00%

Income Statement Dana Dairy Products For the Year Ended December 31, 2010

Sales Revenue		$100,000
Less: Cost of Goods Sold	87,000
Gross Profit		$13,000
Less: Operating Expenses	11,000
Operating Profit		$2,000
Less: Interest Expenses	500
Net Profits Before Taxes	$1,500
Less: Tax (40%)		600
Net Profits after Taxes	$900

Balance Sheet Dana Dairy Product December 31, 2010

	Assets
Cash					$1,000
Accounts Receivable			8,900
Inventories				4,350
	Total Current Assets		$14,250
Gross Fixed Assets			35,000
Less: Accumulated Depreciation	13,250
Net Fixed Assets				21,750
	Total Assets			$36,000
	Liabilities & Stockholders' Equity
Accounts Payable				$9,000
Accruals					6,675
	Total Current Liabilities		$15,675
Long-term Debt				4,125
	Total Liabilities			$19,800
Common Stock				1,000
Retained Earnings				15,200
	Total Stockholders' Equity		$16,200
	Total Liabilities & Stockholders Equity	$36,000

The Net Operating Working Capital investment (NOWC) of Dana Dairy Products in 2010 was _______

(In this case, please exclude cash as an operating asset in your calculation; for CF from Operations purposes, we do not include cash in the NOWC, however for Free Cash Flow purposes, we include cash in NOWC)

Group of answer choices

$1,425

$10,325

$14,250

-$2,425