Mako Industries is considering changes in its working capital policies to improve its cash flow...
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Mako Industries is considering changes in its working capital policies to improve its cash flow cycle. Mako's sales last year were $5 million (all on credit), and its net profit margin was 6%. Its inventory turnover was 7.0 times during the year, and its DSO was 45 days. Its annual cost of goods sold was $3.5 million. The firm had fixed assets totaling $600,000. Mako's payables deferral period is 30 days. Suppose Mako's managers believe the annual inventory turnover can be raised to 8 times without affecting sale or profit margins. What would Mako's ROA have been if the inventory tumover had been 8 for the year? O 19.15% 18.02% @ 18.14% 24.11%
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