Problem:

Strickler's sales last year were $3,250,000 (all on crediStrickler Technology is considering changes in its working capital policies to improve its cash flow cycle.t), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41days. Its annual cost of goods sold was $1,800,00. The firm had fxed assets totaling $535,000. Strickler's payables deferred period is 45 days.

Required:

Question 1: Calcualte Strickler's cash conversion cycle.

Question 2: Assuming Strickler holds negligible amounts of cash and marketable securities, calcualte its total assets turnover and ROA.

Question 3: Suppose Strickler's manager believe the annual inventory turnover can be raised to 9 times without affecting sales. What would Strickler's cash conversion cycle, total assets turnover, and ROA have been if the inventory had been 9 for the years?

Note: Provide support for your rationale.