Financial Impact of SC Decisions

In $2022,$ you decide to take an internship on Tea$4$U after getting a great result on the GCx course.

Your first task is to analyze SC decisions' impact on the company's financial statements. Your boss

provides you with the following information to consider for all analyses you'll need to do moving forward. $($please use the information in the attached photo$)$

Q$1$: Checking some recent reports, you notice that Tea$4$U used cash to make a capital equipment purchase for its warehouses on Jan $1$st$,2022.$ How would this purchase affect the income statement and balance sheet for $2022?$

Select all correct answers:

A$-$ Total Liabilities and Shareholder's Equity decrease

B$-$ Current Assets increase

C$-$ Property, plant, equipment increases

D$-$ Depreciation increases

E$-$ None of the above

Q$2$: The Supply Chain Director, Mr$.$ Connor, is gathering information and requesting reports to define and implement an inventory reduction program. With this, Tea$4$U would reduce its inventory by $$650.$ Naturally, a negative impact on sales can be expected.

If sales are reduced by $$1800$ and the inventory is reduced by $$650,$ how would working capital turnover be affected? Assume all other numbers are the same in $2022$ as in the $2021$ reports

Select the best answer:

A$-$ Working capital turnover will increase by around $7\mathrm{.}9\%$

B$-$ Working capital turnover will decrease by around $7\mathrm{.}9\%$

C$-$ Working capital turnover will increase by around $6\mathrm{.}8\%$

D$-$ Working capital turnover will decrease by around $68\%$

E$-$ Working capital turnover will not change

F$-$ None of the above

Q$3$: Mr$.$ Connor wants to know the expected results of his inventory reduction project. After implementing the project in $2022,$ what would be the cash$-$to$-$cash cycle?

Input your answer using one decimal place. Assume the COGS, Accounts Receivable, and Accounts Payable in $2022$ remain the same as $2021.$ Answer in full days. Also assume that the inventory reduction happens along the year reaching the total in the end of the year.

Q$4$: Which of the following statements describes supply chain actions that definitely reduce the cash$-$to$-$cash cycle?

Select Best Answer

A$-$ Increasing the fill rate by carrying more inventory close to the customers

B$-$ Increasing inventory levels but delivering faster to customers

C$-$ Increasing inventory levels but demanding faster payments from customers

D$-$ Transferring ownership of incoming supplies at the shipment destination instead of at the shipment point of origin

E$-$ None of the above