Working capital cash flow.??Tires for Less is a franchise of tire stores throughout the greater Northwest....

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Finance

Working capital cash flow.??Tires for Less is a franchise oftire stores throughout the greater Northwest. It has projected theunit sales and costs for each tire type for the next four months inthe popup? window:??
Snow Tires
Rain Tires
?All-Terrain Tires
?All-Purpose Tires
??Cost per tire
?$40
?$30
?$48
?$35
? Sales: January
40,000
19,000
5,000
61,000
? Sales: February
38,000
34,000
4,100
54,000
? Sales: March
13,000
45,000
9,000
51,000
? Sales: April
2,100
20,000
9,000
65,000
. The company policy is to have the next? month's anticipatedsales for each tire type in the warehouse. Shipments are made tothe various stores throughout the Northwest from the centralwarehouse. Calculate the monthly increase or decrease in cash flowfor inventory for the first three months of the year given that anincrease in inventory is a use of cash and a decrease in inventoryis a source of cash.

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Solution Opening inventory is Current Month sales Closing inventory is Next month sales Calculation of monthly increase or decrease in cash flow for inventory for the first three months of Year Snow Tires Cost per tire 40 Months Cost of Sales Opening inventory Closing Inventory Working Capital IncreaseDecrease in Cash Flow No of tires Cost Per See Answer

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Transcribed Image Text

Working capital cash flow.??Tires for Less is a franchise oftire stores throughout the greater Northwest. It has projected theunit sales and costs for each tire type for the next four months inthe popup? window:??Snow TiresRain Tires?All-Terrain Tires?All-Purpose Tires??Cost per tire?$40?$30?$48?$35? Sales: January40,00019,0005,00061,000? Sales: February38,00034,0004,10054,000? Sales: March13,00045,0009,00051,000? Sales: April2,10020,0009,00065,000. The company policy is to have the next? month's anticipatedsales for each tire type in the warehouse. Shipments are made tothe various stores throughout the Northwest from the centralwarehouse. Calculate the monthly increase or decrease in cash flowfor inventory for the first three months of the year given that anincrease in inventory is a use of cash and a decrease in inventoryis a source of cash.

	Snow Tires	Rain Tires	?All-Terrain Tires	?All-Purpose Tires
??Cost per tire	?$40	?$30	?$48	?$35
? Sales: January	40,000	19,000	5,000	61,000
? Sales: February	38,000	34,000	4,100	54,000
? Sales: March	13,000	45,000	9,000	51,000
? Sales: April	2,100	20,000	9,000	65,000