Task: Working Capital Cash Flow Cycle: Logitech Technology is considering revolutionizes in its working capital policies to improve its cash flow cycle. Logitech sales previous year were $3,250,000 (all on credit), and its net profit margin was a 7%. Its inventory turnover was 9.0 times throughout the year, and its DSO was 41 days. Its annual cost of goods sold was $1,895,000. The firm had fixed assets totalling $535,000. Logitech payables deferral period is a 45 days.
problem1. Compute Logitech cash conversion cycle.
problem2. Supposing Logitech holds negligible amounts of cash and marketable securities, compute its total assets turnover and ROA.
problem3. Assume Logitech managers think the annual inventory turnover can be increased to 12 times devoid of affecting sales. What would Logitech cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 12 for year?
Note: Remember to comprise a brief discussion of each and every problem.