Question: please help with this problem. please use excel and show all calculations and formulas. thank you. Barry's Bicycles is considering changes in its working capital
Barry's Bicycles is considering changes in its working capital policies to improve its cash flow cycle. Barry's sales last year were $7,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 7.5 times during the year, and its DSO was 39 days. Its annual cost of goods sold was $3,200,000. The firm had fixed assets totaling $785,000. Barry's payables deferral period is 41 days. a. Calculate Barry's cash conversion cycle. b. Assuming Barry's holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Barry's managers believe the annual inventory turnover can be raised to 8.5 times without affecting sales. What would Barry's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8.5 for the year
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