Calculate its total assets turnover and ROA

Assignment Help Financial Management

Reference no: EM131342326

The Wei Corporation expects next year's net income to be $15 million. The firm's debt ratio is currently 40%. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei's dividend payout ratio be next year? Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler sales last year were $3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 9.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was $1,895,000.

The firm had fixed assets totaling $535,000. Strickler’s payables deferral period is 45 days.

Calculate Strickler’s cash conversion cycle.

b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA.

c. Suppose Strickler’s managers believe the annual inventory turnover can be raised to 12 times without affecting sales. What would Strickler’s cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 12 for the year?

Reference no: EM131342326

Questions Cloud

Construct validity of a psychological measure : Read about a measure that interests you and describe the reliability and validity research reported.

Write an research paper essay about racism in america : Write an Research paper essay about Racism in America (effect to society, human, violence ...), should talk about between white people and black or other.

How to apply kantian and utilitarian theories : How to apply Kantian and Utilitarian theories to the situation that existed at Memorial Medical Center in the days immediately after Hurricane Katrina, was Dr. Anna Pou's treatment of the LifeCare patients on the seventh floorof the medical center..

Amplify the detection of very small amount of antigen : ELISA uses an enzyme-linked antibody to detect and antigen. Briefly explain how use of the enzyme is ELISA could amplify the detection of a very small amount of antigen in a sample.

Calculate its total assets turnover and ROA : The Wei Corporation expects next year's net income to be $15 million. The firm's debt ratio is currently 40%. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. Assuming Strickler holds negl..

What are the key elements from the studies : What are the key elements from the studies that Darpa must take into account in his role as the director of homeland security for the City of Centervale?

The effect of low ph on enzyme activity : Design an experiment in which you will test the effect of an acidic fluid on enzymatic activity. (Recall: enzymes are proteins.) To complete this project, it may be useful for you to review the Scientific Method Tutorial (found the Course Content ..

Explain theme or ideas that unite different ethical theories : Identify the basic themes, topics, and concepts that make up the discipline of ethics. Explain the themes or ideas that unite the different ethical theories.

Discuss the differences between static and flexible budgets : Discuss the differences between static and flexible budgets.- Why are flexible budgets superior to static budgets for performance reporting?

User Account

All Pages