Use the sales forecast and target ratios to forecast cach of the following elements of...
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Accounting
Use the sales forecast and target ratios to forecast cach of the following elements of OB's balance sheet:
1. Inventory.
2. Accounts receivable
3. Accounts payable
4. Cash
5. Current ratio
You have been asked to project next year's working capital requirements of the OB company. The company's sales forecast for next year is $12 million. OB's target ratios are: Gross profit margin 45% Inventory turnover 6 times Receivables turnover 12 times Cash ratio 1.2 times Cash cycle 45 days Use the sales forecast and target ratios to forecast each of the following elements of OB's balance sheet: 1. Inventory 2. Accounts receivable 3. Accounts payable 4. Cash 5. Current ratio Hint: Accounts Payable is only Current Liability and Inventory Ending is equal to Inventory Beginning
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