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Excel Online Structured Activity: Cash conversion cycle Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO)

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Excel Online Structured Activity: Cash conversion cycle 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 $218000; its cost of goods sold is 80% of sales, and it earned a net profit of 7%, or $15260. It turned over its inventory 5 times during the year, and its DSO was 38.5 days. The firm had fixed assets totaling $49000, Chastain's payables deferral period is 40 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. X1 Open spreadsheet a. Calculate Chastain's cash conversion cycle. Round your answer to two decimal not round intermediate calculations. days its total assets turnover and ROA Round your answers to two decimal b. Assuming Chastain holds negligible amounts of cash and places. Do not round intermediate calculations Total assets turnover ROA c. Suppose Chastain's managers believe that the inventory turnover can be raised to 9.1 times. What would Chastain's cash conversion cyde, total assets turnover, and ROA have been if the inventory turnover had been 9.1 for 20167 Round your answers to two decimal places. Do not round intermediate calculations. Cash conversion cycle Total assets turnover ROA Format Painter Clipboard Undo M23 D 1 Cash conversion cycle $218,000 80.00% 7.00% 5 6 Sales Cost of good sold % Net profit margin Original Inventory turnover ratio DSO Fored assets Payables deferral period 5.0 38.5 $49.000 00 Formulas Calculate inventory conversion period: 12. Inventory 13 Inventory conversion period (days) 15 Calculate cash conversion cycle: 16 Cash conversion cycle (days) 18 Calculate total assets turnover: 19 Accounts receivable 20 Total assets 21 Total assets tumover 23 Calculate return on assets: 24 Net income 25 Return on assets (ROA) AWWWWYWWRONBONNNNSERER 27 Revised inventory turnover ratio 29 Calculate inventory conversion period: 30 Inventory Inventory conversion period (days) Calculate cash conversion cycle: Cash conversion cycle (days) Calculate total assets turnover: Accounts receivable Total assets Total assets turnover #N/A ANIA Calculate return on assets: Net income Return on assets (ROA) L

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