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Mako Industries is considering changes in its working capital policies to improve its cash flow cycle. Mako's sales last year were $5.5 million (all on
Mako Industries is considering changes in its working capital policies to improve its cash flow cycle. Mako's sales last year were $5.5 million (all on credit), and its net profit margin was 9%. Its inventory turnover was 5.0 times during the year, and its DSO was 38 days. Its annual cost of goods sold was $3.85 million. The firm had fixed assets totaling $725,000. Mako's payables deferral period is 44 days. Assume Mako holds negligible amounts of cash and marketable securities, calculate its total asset turnover. 2.66x 2.54x 2.60x 2.50x
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