Working capital policies to improve its cash flow cycle

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Reference no: EM131879163

Barton Enterprises is considering changes in its working capital policies to improve its cash flow cycle. Barton’s sales last year were $3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 40 days. Its annual cost of goods sold was $1,800,000. The firm had fixed assets totaling $535,000. Barton’s payables deferral period is 45 days. If the annual inventory turnover can be raised to 9 times without affecting sales, what would Barton’s cash conversion be for the year?

Reference no: EM131879163

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