The Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash

The Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash flow cycle. Christies sales last year (all on credit) were $150000 and it earned a net profit of 6% or $9000. It turned over its inventory 7.5 times during the year and its DSO was 36.5 days. Its annual cost of goods sold was $121667. The firm had fixed assets totaling $35000. Christies payables deferral period is 40 days.

Leave a Reply

Your email address will not be published. Required fields are marked *