A company has P20 million in sales and an inventory turnover ratio of 2.0. If it can reduce it's inventory and improve it's inventory turnover ratio to 2.5 with no loss in sales, by how much will FCF increase?
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A company has P20 million in sales and an inventory turnover ratio of 2.0. If it can reduce it's inventory and improve it's inventory turnover ratio to 2.5 with no loss in sales, by how much will FCF increase?
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- A company has $20 million in cost of goods sold and an inventoryturnover ratio of 2.0. If it can reduce its inventory and improve itsinventory turnover ratio to 2.5 with no loss in units sold and no changein cost of goods sold, by how much will FCF increase? ($2 million)Williams & Sons last year reported sales of $73 million, cost of goods sold (COGS) of $60 million, and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.Williams & Sons last year reported sales of $127 million, cost of goods sold (COGS) of $105 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
- Airport Motors, Inc. has $2,305,800 in current assets and $854,000 in current liabilities. The managers want to increase the firm’s inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below a 2.1, (assuming all other current assets and current liabilities remain constant)?Awkward Inc. currently has $2,145,000 in current assets and $858 in current liabilities. The company's managers want to increase the firm inventory, which will be financed by short-term note with the bank. What level of inventories can the firm carry without its current ratio falling below 2.0?Copmany A. has $2,491,100 in current assets and $859,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.2 (assuming all other current assets and current liabilities remain constant)?
- Lance Motors has current assets of $1.2 million. The company’s current ratio is 1.2, its quick ratio is 0.7, and its inventory turnover ratio is 4. The company would like to increase its inventory turnover ratio to the industry average, which is 5, without reducing its sales. Any reductions in inventory will be used to reduce the company’s current liabilities. What will be the company’s current ratio, assuming that it is successful in improving its inventory turnover ratio to 5?Airspot Motors, Inc. has $2,343,600 in current assets and $868,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.1 (assuming all other current assets and current liabilities remain constant)?The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin = 0.10; and dividend payout ratio = 0.45, or 45%. Sales last year were $100 million. suppose Barnsdale’s financial consultants report (1) that the inventory turnover ratio (sales/inventory) is 3, compared with an industry average of 4, and (2) that Barnsdale could reduce inventories and thus raise its turnover ratio to 4 without affecting its sales, profit margin, or other asset turnover ratios. Requirement: a. Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 1st year if sales grow at a rate of 20% per year. Sample format: 1,111,111 b. Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 2nd year if sales grow at a rate of 20% per year. Sample format: 1,111,111
- Krating Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; Profit Margin = 0.10; and Dividend Payout Ratio = 0.45, or 45%. Sales last year were $100 million, suppose Krating’s financial consultants report (1) that the Inventory Turnover Ratio (sales/inventory) is 3, compared with an Industry Average of 4, and (2) that Krating could reduce inventories and thus raise its Turnover Ratio to 4 without affecting its Sales, Profit Margin, or other Asset Turnover Ratios. Under these conditions, use the AFN equation to determine the amount of additional funds Krating would require during the 1st year if sales grow at a rate of 20% per year. Show Solutions and Explain. Under these conditions, use the AFN equation to determine the amount of additional funds Krating would require during the 2nd year if sales grow at a rate of 20% per year. Show Solutions and Explain.The Diamond Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; Profit Margin = 0.10; and Dividend Payout Ratio = 0.45, or 45%. Sales last year were $100 million, suppose Diamond’s financial consultants report (1) that the Inventory Turnover Ratio (sales/inventory) is 3, compared with an Industry Average of 4, and (2) that Diamond could reduce inventories and thus raise its Turnover Ratio to 4 without affecting its Sales, Profit Margin, or other Asset Turnover Ratios. A. Under these conditions, use the AFN equation to determine the amount of additional funds Diamond would require during the 1st year if sales grow at a rate of 20% per year. B. Under these conditions, use the AFN equation to determine the amount of additional funds Diamond would require during the 2nd year if sales grow at a rate of 20% per year.The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin = 0.10; and dividend payout ratio = 0.45, or 45%. Sales last year were $100 million. suppose Barnsdale’s financial consultants report (1) that the inventory turnover ratio (sales/inventory) is 3, compared with an industry average of 4, and (2) that Barnsdale could reduce inventories and thus raise its turnover ratio to 4 without affecting its sales, profit margin, or other asset turnover ratios. 1.) Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 1st year if sales grow at a rate of 20% per year. 2.)Under these conditions, use the AFN equation to determine the amount of additional funds Barnsdale would require during the 2nd year if sales grow at a rate of 20% per year.
