Reference no: EM132925671

Question - CompuTech's Income Statement for the year ended, December 31, 2021.

Sales Revenue

Gross Sales Revenue $ 360,000

Net Sales Revenue $ 360,000

Cost of Goods Sold

Raw Materials $ 132,000

Total Cost of Goods Sold $ 132,000

Gross Profit $ 228,000

Operating Expenses

Sales salaries $ 80,000

Advertising $ 3,000

Travel $ 2,000

Depreciation $ 38,000

Office lease $ 13,000

Admin Salaries $ 40,000

Total Operating Expenses $ 176,000

Operating Profit $ 52,000

Other Income & Expenses

Financial cost $ 10,000

Less Interest Charges

Income before Taxes $ 42,000

Income Taxes $ 22,000

Net Income $ 20,000

Required -

Q1: What is the company's expected Current Asset level? What is the company's Net Property & Plant level?

Q2: Looking at your 2021 Income Statement and Balance Sheet from Module 2 what is the projected CompuTech average outstanding Accounts Receivables? What is the company's Inventory Turnover rate?

Q3: If the company wished to exhibit a 30-day receivable average, what should their level of Accounts Receivable become? If they were able to invest the savings at 7% what would their impact on profits be?

Q4: If CompuTech's competition is experiencing a 6 X turnover on inventory, is CompuTech matching this performance, and if not what level of inventory should they be displaying?