How much cash would be freed-up

Reference no: EM13287598

Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations.

Stone Rock has:

$13 million of sales
$2 million of inventories
$3 million of receivables
$2 million of payables

If Stone Rock could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold.

How much cash would be freed-up? Round your answer to the nearest cent.

By how much would pre-tax profits change? Round your answer to the nearest cent.

Reference no: EM13287598

Questions Cloud

What are your forecasts of the company year-end inventory : What are your forecasts of the company's year-end inventory turnover ratio? Round your answer to two decimal places.

The company''s weighted cost of capital : The company's weighted cost of capital (WACC)

Explain how the number of moles of the gas varies : In the simulation, set the temperature of the sample gas to 304 . Click on the "Run" button and observe how the number of moles of the gas varies with an increase in the gas's volume

Determine what are the possible values for resistance : Two resistances having values of R and 3R are inparallel. R and the equivalent resistance are both integers. What are the possible values for R

How much cash would be freed-up : By how much would pre-tax profits change? Round your answer to the nearest cent.

What is the expected growth rate in beacon dividends : For the coming year, the company is forecasting a 35% increase in sales; and it expects that its year-end operating costs, including depreciation, will equal 65% of sales.

Why is op-amp designed to be sensitive to voltage difference : a) Most op-amps are powered by bipolar power supplies. What is the principal advantage of this particular feature b)The input stage of an op-amp responds to the voltage (V+ -V-). Why is the op-amp designed to be sensitive to a voltagedifference rat..

Explain empty can contains residual gaseous propellant : Aerosol cans have a label that warns the user not to use them above a certain temperature and not to dispose of them by incineration. Even an empty can contains residual gaseous propellant.

Calculate the potential difference between its feet : Birds resting on high-voltage power lines are a common sight. The copper wire on which a bird stands is 2.5 cm in diameter, calculate the potential difference between its feet

User Account

All Pages