1. Beverly Corp. had total sales of $1,200,000 in 2010 (80 percent of its sales are credit). The company's gross profit margin is 25 percent, its ending inventory is $150,000, and its accounts receivable balance is $90,000. What additional amount of cash could the firm have generated if it had increased its inventory turnover ratio to 9.0 and reduced its average collection period to 28.21875 days?

2. Complete the following balance sheet using the information given. Round account balances to the nearest dollar.

Balance Sheet			Income Statement
Cash			Sales (All Credit)	$20,000
Accounts receivable			Cost of goods sold	10,000
Inventory			Operating expenses	6,000
Net fixed assets			Interest expense	100
Total assets			Taxes	1,365
			Net income	$2,535
Accounts payable
Short-term notes payable	$1,425		Ratios:
Long-term debt			Profit Margin =	12.675%
Common stock	$5,000		Return on Equity =	15%
Retained earnings			Quick Ratio =	1.2
Total Liabilities and equity			Return on Total Assets =	10%
			Fixed Asset Turnover =	1.6
			Current Ratio =	2
			Days Sales Outstanding =	45

Answer rating: 100% (QA)

Beverly Corp Cash Generation Analysis 1 Additional Cash Generated Current Scenario We dont have enough information to directly calculate the Cost of Goods Sold COGS However we can estimate it using th... View the full answer