We witness the following infomation on Lona's Lil Inc. for the
most recent year are shown below, along with the inventory
conversion period (ICP) of the firms against which it benchmarks.
The firm's new CFO believes that the company could reduce its
inventory enough to reduce its ICP to the benchmarks' average. If
this were done, by how much would inventories decline? Use a
365-day year.
Cost of goods sold = |
$85,000 |
Inventory = |
$20,000 |
Inventory conversion period (ICP) = |
85.88 |
Benchmark inventory conversion period (ICP) = |
38.00 |
$7,316 |
$8,129 |
$9,032 |
$10,036 |
$11,151 |
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We witness the following infomation on Lona's Lil Inc. for the most recent year are shown...
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