EXERCISE 4: USING FINANCIAL RATIOS TO CALCULATE CASH FLOW PROJECTIONS After being in business for six years, Graham Mason, owner of a small retail store, is considering buying a new information system that would provide him with betrer operating and financial information. Graham feels that the new system would give him better control over his inventories so that he would be able to manage his pur. chases more wisely. He is also interested in renovating his store. After going through some detailed calculations, he determines that he would have to invest around $250,000 in early January 2014. Graham is considering borrowing some money from the bank. However, before meeting his banker, he asks his accoumtant to figure out how much cash he could squeeze from his operations (internallyy) to help him finance his two projects. Graham feels that he can improve his average collection period to 40 days and turn his inventory three times a year by December 31,2013 (industry averages). With the following partial information, calculate how much cash Graham could raise internally by December 2013 . 4 Describe how financial ratios can be used to measure and improve a company's financial performance