The company manager targets to reduce the current ratio in the year (2020) by 33% from the previous year (2019), this requiring to downsize the amount of the total current asset. To what level can the manager reduce the total current asset to achieve this target at (2020)? Data of 2019 Total Asset Turnover 2 Times Net Fixed Asset 400 (Thousand OMR) Total Liabilities 400 (Thousand OMR) Sales 2000 (Thousand OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) Long-term Liabilities 200 (Thousand OMR)
The company manager targets to reduce the current ratio in the year (2020) by 33% from the previous year (2019), this requiring to downsize the amount of the total current asset. To what level can the manager reduce the total current asset to achieve this target at (2020)? Data of 2019 Total Asset Turnover 2 Times Net Fixed Asset 400 (Thousand OMR) Total Liabilities 400 (Thousand OMR) Sales 2000 (Thousand OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) Long-term Liabilities 200 (Thousand OMR)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter9: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 1P: Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million...
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The company manager targets to reduce the current ratio in the year (2020) by 33% from the previous year (2019), this requiring to downsize the amount of the total current asset. To what level can the manager reduce the total current asset to achieve this target at (2020)?
Data of 2019
Total Asset Turnover
2 Times
Net Fixed Asset
400 (Thousand OMR)
Total Liabilities
400 (Thousand OMR)
Sales
2000 (Thousand OMR)
Quick Ratio
1.5 Times
Accounts Receivable
150 (Thousand OMR)
Long-term Liabilities
200 (Thousand OMR)
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