Assume sales increase by 10% next year, and COGS (costs of goods sold) drops to 80% of
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Assume sales increase by 10% next year, and COGS (costs of goods sold) drops to 80% of sales. If the company increases its inventory ratio to 5:4, how much cash is generated from the reduction in inventory?
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Period Ending Total Revenue Cost of Revenue Gross Profit Depreciation/Amortization Expense Other Expense Earnings Before Interest & Taxes Interest Expense Earnings Before Taxes Taxes (20%) Net Income Dividends Addition to Retained Earnings Cash And Equivalents Short-Term Investments Receivables Inventory Current Assets Property, Plant, and Equipment (Gross) Accumulated Depreciation Net Fixed Assets Current Year 7,000,000 $ 6,300,000 700,000 300,000 420,000 (20,000) 125,000 (145,000) (29,000) $ $ (116,000) 10,000 (126,000) 5,000 20,000 863,014 1,260,000 2,148,014 1,300,000 400,000 900,000 Period Ending Total Revenue Cost of Revenue Gross Profit Depreciation/Amortization Expense Other Expense Earnings Before Interest & Taxes Interest Expense Earnings Before Taxes Taxes (20%) Net Income Dividends Addition to Retained Earnings Cash And Equivalents Short-Term Investments Receivables Inventory Current Assets Property, Plant, and Equipment (Gross) Accumulated Depreciation Net Fixed Assets Current Year 7,000,000 $ 6,300,000 700,000 300,000 420,000 (20,000) 125,000 (145,000) (29,000) $ $ (116,000) 10,000 (126,000) 5,000 20,000 863,014 1,260,000 2,148,014 1,300,000 400,000 900,000
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Current inventory turnover ratio T 1 Cost of goods ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1305084858
12th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
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