Question
Management of Textbook Brokers is developing a short-term financial plan for the upcoming year. In particular, management would like to determine the effect on operating
"Management of Textbook Brokers is developing a short-term financial plan for the upcoming year. In particular, management would like to determine the effect on operating cash flow that would occur if the firm managed to maintain the benchmark values for their industry for DIH, DSO, and DPO. Textbook Brokers expects to have revenue and CGS of $3,500,000 and $1,000,000, respectively, in the next year.
Use the information to estimate the change in operating cash flow that would occur from meeting the industry benchmark values.
Current DIH = 60 days | Industry Benchmark DIH = 50 days
Current DSO = 30 days | Industry Benchmark DSO = 10 days
Current DPO = 40 days | Industry Benchmark DPO = 60 days"
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