Suppose Weatherfords financial consultants report (1) that its Sales/Inventory ratio = 3 times versus an industry average

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Suppose Weatherford’s financial consultants report (1) that its Sales/Inventory ratio = 3 times versus an industry average of 4 times and (2) that Weatherford can reduce inventories and thus raise its Sales/Inventory ratio to 4 without affecting sales, the profit margin, or other asset turnover ratios. Under those conditions, use the AFN equation to determine the amount of additional funds Weatherford will require next year if sales grow by 20%.

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Fundamentals Of Financial Management

ISBN: 9780357517574

16th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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