Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Grant Communications is forecasting its financial statements for the upcoming year. Highlights include: - Current assets of $6 million - Current ratio of 2.0 -

image text in transcribed

Grant Communications is forecasting its financial statements for the upcoming year. Highlights include: - Current assets of $6 million - Current ratio of 2.0 - Sales of $20 million - Inventory turnover ratio (Sales/Inventory) of 6 The company's CFO is concerned about the forecasted inventory turnover ratio. Her goal is cut inventory enough to obtain an inventory turnover ratio of X, which is the industry average, while still maintaining sales at $20 million. If the company can accomplish this goal, the cash generated from the cut in inventories will be used to cut accounts payable. This will give the firm a Quick Ratio [(Current Assets - Inventory) / Current Liabilities ] of 1.70. What is X, the desired inventory turnover ratio? Enter your answer, truncated to 2 decimal places. For example, enter 7.777 as 7.77

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles And Applications

Authors: Sheridan Titman, Arthur Keown, John Martin

13th Global Edition

1292222182, 978-1292222189

More Books

Students also viewed these Finance questions

Question

Evaluate the sum that converges. Identify any that diverge. 3i i=1

Answered: 1 week ago

Question

Explain all drawbacks of the application procedure.

Answered: 1 week ago

Question

Determine Leading or Lagging Power Factor in Python.

Answered: 1 week ago

Question

Understand some techniques for evaluating the HRM function

Answered: 1 week ago