Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Strickler Technology is considering changes in its working capital policies to improve, its cash flow cycle. Strickler's sales last year were $2,390,000 (all on credit),

image text in transcribed
Strickler Technology is considering changes in its working capital policies to improve, its cash flow cycle. Strickler's sales last year were $2,390,000 (all on credit), and its net profit margin was 4%. Its inventory turnover was 7.0 times during the vear, and its DSO was 37 days. Its annual cost of goods sold was $1,400,000. The firm had fixed assets totaling $430,000. Strickler's payables deferral perlod is 40 days. Assume a 365 -day year. Do not round intermediate calcutations. a. Calculate Strickler's cash conversion cycle, Do not round intermediate calculations. Round your answer to two decimal places. days b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Do not round intermediate calculations. Round your answers to two decimal places. c. Suppose Strickler's managers believe the annual inventory turnover can be raised to 10 times without affecting sale or profit margins. What would Strickler's - cash conversion cycle, total assets turnover, and ROA have been if the inventory tumover had been 10 for the year? Do not round intermediate calculations. Round your answers to two decimal places. Cash conversion cycle: days Total ascots turnover: x- ROA: \%

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

The Economics And Finance Of Professional Team Sports

Authors: Daniel Plumley, Rob Wilson

1st Edition

0367655667, 978-0367655662

More Books

Students also viewed these Finance questions

Question

Describe contributions of Melanie Klein.

Answered: 1 week ago