Question: trickler Technology is considering changes in its working capital policies to improve scash flow cycle. Strickler's sales last year were $3,080,000 (all on credit), and

trickler Technology is considering changes in its working capital policies to improve scash flow cycle. Strickler's sales last year were $3,080,000 (all on credit), and its et profit margin was 6%. Its inventory turnover was 4.5 times during the year, and ts DSO was 39 days. Its annual cost of goods sold was $1,800,000. The firm had ixed assets totaling $525,000. Strickler's payables deferral period is 45 days. Assume 365-day year. Do not round intermediate calculations. a. Calculate Strickler's cash conversion cycle. Do not round intermediate calculations. Round your answer to two decimal places. days b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Do not round intermediate calculations. Round your answers to two decimal places. Total assets turnover: (3) ROA: % c. Suppose Strickler's managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Strickler's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year? Do not round intermediate calculations. Round your answers to two decimal places. Cash conversion cycle: days Total assets turnover: x ROA: %
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
