Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle Strickler's sales last year were $3,440,000 (all on credit), and its net profit margin was 4 Its inventory turnover was 6 0 times during the year, and its DSO was 42 days Its annual cost of goods sold was $1,800,000 The firm had fixed assets totaling $540,000 Strickler's payables deferral period is 46 days Assume a 365 day year Do not round intermediate calculations Calculate Strickler's cash conversion cycle Do not round intermediate calculations Round your answer to two decimal places days 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 Total assets turnover ROA Suppose Strickler's managers believe the annual inventory turnover can be raised to 8 times without affecting sale or profit margins What would Strickler's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8 for the year Do not round intermediate calculations Round your answers to two decimal places Cash conversion cycle days Total assets turnover ROA

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 02, 2024

Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $3,440,000 (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 $3,440,000 (all on credit), and its net profit margin was 4%. Its inventory turnover was 6.0 times during the year, and its DSO was 42 days. Its annual cost of goods sold was $1,800,000. The firm had fixed assets totaling $540,000. Strickler's payables deferral period is 46 days. Assume a 365-day year. Do not round intermediate calculations.

Calculate Strickler's cash conversion cycle. Do not round intermediate calculations. Round your answer to two decimal places.

days
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.

Total assets turnover:

ROA: %
Suppose Strickler's managers believe the annual inventory turnover can be raised to 8 times without affecting sale or profit margins. What would Strickler's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8 for the year? Do not round intermediate calculations. Round your answers to two decimal places.

Cash conversion cycle: days

Total assets turnover:

ROA: