Question

In: Finance

Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital...

Problem 16-12
Working Capital Cash Flow Cycle

Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,825,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 5.5 times during the year, and its DSO was 43 days. Its annual cost of goods sold was $1,650,000. The firm had fixed assets totaling $495,000. Strickler's payables deferral period is 46 days. Assume 365 days in year for your calculations. Do not round intermediate calculations.

  1. Calculate Strickler's cash conversion cycle. Round your answer to two decimal places.
          days
  2. 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.
          %
  3. 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 have been if the inventory turnover had been 8 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 8 for the year? Round your answer to two decimal places.
          x
    What would Strickler's ROA have been if the inventory turnover had been 8 for the year? Round your answer to two decimal places.
          %

Solutions

Expert Solution


Related Solutions

Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital...
Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $3,140,000 (all on credit), and its net profit margin was 8%. Its inventory turnover was 7 times during the year, and its DSO was 36 days. Its annual cost of goods sold was $1,750,000. The firm had fixed assets totaling $515,000. Strickler's payables deferral period is 40 days. Assume 365 days in...
Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital...
Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,357,500 (all on credit), and its net profit margin was 7%. Its inventory turnover was 5.5 times during the year, and its DSO was 43 days. Its annual cost of goods sold was $1,375,000. The firm had fixed assets totaling $397,500. Strickler's payables deferral period is 46 days. Assume 365 days in...
Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital...
Problem 16-12 Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,825,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 5.5 times during the year, and its DSO was 43 days. Its annual cost of goods sold was $1,650,000. The firm had fixed assets totaling $495,000. Strickler's payables deferral period is 46 days. Assume 365 days in...
Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to...
Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $1,700,000 (all on credit), and its net profit margin was 5%. Its inventory turnover was 4.5 times during the year, and its DSO was 45 days. Its annual cost of goods sold was $900,000. The firm had fixed assets totaling $265,000. Strickler's payables deferral period is 51 days. Assume a 365-day year. Do not...
Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to...
Working Capital Cash Flow Cycle Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $3,805,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 7.5 times during the year, and its DSO was 32 days. Its annual cost of goods sold was $2,250,000. The firm had fixed assets totaling $655,000. Strickler's payables deferral period is 35 days. Assume 365 days in year for...
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle....
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,860,000 (all on credit), and its net profit margin was 8%. Its inventory turnover was 5.0 times during the year, and its DSO was 32 days. Its annual cost of goods sold was $1,500,000. The firm had fixed assets totaling $455,000. Strickler's payables deferral period is 35 days. Assume a 365-day year. Do not round intermediate calculations. Calculate Strickler's...
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle....
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...
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle....
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,555,000 (all on credit), and its net profit margin was 8%. Its inventory turnover was 4.5 times during the year, and its DSO was 44 days. Its annual cost of goods sold was $1,350,000. The firm had fixed assets totaling $420,000. Strickler's payables deferral period is 50 days. Assume 365 days in year for your calculations. Do not round...
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle....
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $3,410,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6 times during the year, and its DSO was 31 days. Its annual cost of goods sold was $1,800,000. The firm had fixed assets totaling $530,000. Strickler's payables deferral period is 34 days. Assume 365 days in year for your calculations. Do not round...
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle....
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $4,165,000 (all on credit), and its net profit margin was 8%. Its inventory turnover was 7 times during the year, and its DSO was 33 days. Its annual cost of goods sold was $2,450,000. The firm had fixed assets totaling $715,000. Strickler's payables deferral period is 39 days. Assume 365 days in year for your calculations. Do not round...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT