Question: Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were $3,250,000 (all on credit),
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers 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 41 days. Its annual cost of goods sold was $1,800,000. The firm had fixed assets totaling $535,000. Stricklers payables deferral period is 45 days.
Supose this changes to:
Suppose COGS are $1.8 million, the profit margin is 6.7%, the inventory turnover is 7 times, and the days sales outstanding (DSO) is 42.8 days. All other values stay as listed in the original problem.
What is the company's return on assets (ROA). Give your answer in percentage rounded to one decimal, i.e. for a result of 12.345%, enter 12.3.
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