Question: Barton Enterprises is considering changes in its working capital policies to improve its cash flow cycle. Bartons sales last year were $3,250,000 (all on credit),
Barton Enterprises is considering changes in its working capital policies to improve its cash flow cycle. Bartons sales last year were $3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 40 days. Its annual cost of goods sold was $1,800,000. The firm had fixed assets totaling $535,000. Bartons payables deferral period is 45 days. If the annual inventory turnover can be raised to 9 times without affecting sales, what would Bartons cash conversion be for the year?
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
