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Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $100,000 (all on credit),
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $100,000 (all on credit), and it earned a net profit of 4%. Its inventory turnover was 10 times during the year, and its DSO was 31.5 days. Its annual cost of goods sold was $121,093. The firm had fixed assets totaling $48,000. Strickler's payables deferral period is 37 days. Assume 365 days in year for your calculations. Do not round intermediate calculations.
- Calculate Strickler's cash conversion cycle. Round your answer to two decimal places. ____ days
- Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover. Round your answer to two decimal places. ____ x Calculate its ROA. Round your answer to two decimal places. ____ %
- Suppose Strickler's managers believe that the inventory turnover can be raised to 7 times without affecting sales and cost of goods sold. What would Strickler's cash conversion cycle have been if the inventory turnover had been 7 for the year? Round your answer to two decimal places. ____ days What would Strickler's total assets turnover have been if the inventory turnover had been 7 for the year? Round your answer to two decimal places. ____ x What would Strickler's ROA have been if the inventory turnover had been 7 for the year? Round your answer to two decimal places. ____ %
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