Computing cash conversion cycle and total assets turnover

Reference no: EM1310541

Q1) Thompson Corporation is trying to find out effect of its inventory turnover ratio and DES on its cash flow cycle. Sales last year (all on credit) is $150,000, Net profit last year is $9,000.DSO is 36.5 days, inventory turnover five times in the year. Fixed assets is $35,000. Payable deferral period is 40 daysa. Compute its cash conversion cycleb. Suppose Thompson holds negligible amounts of cash and marketable securities, compute its total assets turnover and ROAc. Assume Thompson’s managers believe that inventory turnover can be raised to 7.3 times. Compute its cash conversion cycle, total assets turnover, and ROA have been if inventory turnover had been 7.3 for year?

Reference no: EM1310541

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