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The following balances and turnover ratios for individual operating assets and operating liabilities have been calculated using end-of-year figures based on Trail Inc.'s reformulated 2020
The following balances and turnover ratios for individual operating assets and operating liabilities have been calculated using end-of-year figures based on Trail Inc.'s reformulated 2020 Balance Sheet: Balance Turnover 55.00 22.00 9.17 Operating cash Accounts receivable Inventory Property, plant & equipment Accounts payable Provisions $ 50,000 $125,000 $300,000 $750,000 $175,000 $75,000 3.67 15.71 36.67 Net Operating Assets $975,000 2.82 Assuming that Trail's operating profit margin after tax remains the same, what will happen to its RNOA if the Accounts Receivable turnover increases to 24, the inventory turnover increases to 11, and the Accounts Payable turnover increases to 17.5? O 1. It is not possible to determine how the changes will affect Trail's RNOA based on the information provided O 2. Trail's RNOA will decrease O 3. Trail's RNOA will remain the same 4. Trail's RNOA will increase
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