Question: Table 1 provides projected financial statement values for Firm X (a firm thos you work for as a treasury analyst). Calculate the change in operating
Table 1 provides projected financial statement values for Firm X (a firm thos you work for as a treasury analyst). Calculate the change in operating cash flow that would result if management implemented the strategic and operational tactics needed to achieve the best in indust target values for the given operating working capital accounts. Discuss why operating cash flow would increase. Table 1 Best in Industry: Targets for Next Year Firm X: Projected Value for Next Year Accounts Receivable as 10% 15% a % of Revenues Inventory Revenues as a % of 15% 10% Accounts Payable % of Revenues 15% 20% as a Revenues Depreciation Expense Net Income $210M $15M $55M $350M n/a $90M
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