Problem 3.21 LO 3-6 Calculate and analyze liquidity measures Following are the current asset and current liability sections of the balance sheets for Freedom Inc. at January 31, 2023 and 2022 (in millions): January 31, January 31, 2023 2022 Current Assets Cash $30 $10 Accounts receivable 20 25 Inventories 40 45 Total current assets $90 $80 Current Liabilities Note payable $20 $20 Accounts payable 30 10 Other accrued liabilities 10 10 Total current liabilities $60 $40 Required: Calculate the working capital and current ratio at each balance sheet date. Round your current ratio answers to one decimal place. b. Evaluate the firm's liquidity at each balance sheet date. C. Assume that the firm operated at a loss during the year ended January 31, 2023. How could cash have increased during the year?Problem 3.23 LO 3-3 Applications of ROI using the DuPont model; manufacturing versus service firm Mindspin Labs Inc. is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentrating on providing specialized maintenance services to other manufacturers. Management of Mindspin Labs has had a target ROI of 15% on an asset base that has averaged $12 million. To achieve this ROI as a manufacturing company, average total asset turnover of 2.0 was required. If the company shifts its operations from manufacturing to providing maintenance services, it is estimated that average total assets will decrease to $5 million. Required: a. Calculate net income, margin, and sales required for Mindspin Labs to achieve its target ROI as a manufacturing firm. b . Assume that the average margin of maintenance service firms is 3%%, and that the average ROI for such firms is also 15%. Calculate the net income, sales, and total asset turnover that Mindspin Labs will have if the change to services is made and the firm is able to earn an average margin and achieve an ROI of 15%. Problem 3.24 LO 3-3 ROI analysis using the DuPont model Charlie's Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, high-service" operation that provides lots of assistance to its customers. Margin has averaged a relatively high 40%% per year for several years, but turnover has been a relatively low 0.6 based on average total assets of $3,000,000. A discount furniture store is about to open in the area served by Charlie's, and management is considering lowering prices to compete effectively. Required: Page 91 a. Calculate current sales and ROI for Charlie's Furniture Store. b . Assuming that the new strategy would reduce margin to 30%%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie's currently earns. C. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to increase my sales volume by 50% to earn the same return?" Given the results of your analysis, how would you react to Charlie? Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI. Think of an alternative strategy that might help Charlie maintain the competitiveness of his business. Explain the strategy, and then describe the likely impact of this strategy on margin, turnover, and ROI