Business, 11.12.2019 22:31 chris4212

Merton analytics is considering changes in its working capital policies to improve its cash ﬂow cycle. merton’s sales last year were $4,250,000 (all on credit), and its net proﬁt margin was 7%. its inventory turnover was 7.5 times during the year, and its dso was 41 days. its annual cost of goods sold was $2,200,000. the ﬁrm had ﬁxed assets totaling $585,000. merton’s payables deferral period is 42 days. a. calculate merton’s cash conversion cycle. b. assuming merton holds negligible amounts of cash and marketable securities, calculate its total assets turnover and roa. c. suppose merton’s managers believe the annual inventory turnover can be raised to 9.5 times without affecting sales. what would merton’s cash conversion cycle, total assets turnover, and roa have been if the inventory turnover had been 9.5 for the year?

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Merton analytics is considering changes in its working capital policies to improve its cash ﬂow cycl...

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