Consultations with several key managers within nwc

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Consultations with several key managers within NWC, including production, inventory, and receivable managers, have yielded some very useful information.

(1) NWC's high DSO is largely due to one significant customer who battled through some hardships the past 2 years but who appears to be financially healthy again and is generating strong cash flow. As a result, NWC's accounts receivable manager expects the firm to lower receivables enough to make the DSO equal to 34 days without adversely affecting sales.

(2) NWC was operating a little below capacity; but its forecasted growth will require a new facility, which is expected to increase NWC's net fixed assets to $700 million.

(3) A relatively new inventory management system (installed last year) has taken some time to catch on and to operate efficiently. NWC's inventory turnover improved slightly last year, but this year NWC expects even more improvement as inventories decrease and inventory turnover is expected to rise to 10

Incorporate that information into the 2009 initial forecast results, as these adjustments to the initial forecast represent the final forecast for 2009.

Reference no: EM131106519

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