Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $3,207,500 (all on credit), and its net profit margin was 5%. Its inventory turnover was 7.5 times during the year, and its DSO was 40 days. Its annual cost of goods sold was $1,875,000. The firm had fixed assets totaling $562,500. Strickler's payables deferral period is 46 days. Assume a 365-day year. Do not round intermediate calculations. Required:
a. Calculate Strickler's cash conversion cycle.
b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover.
c. Calculate its ROA.
d. Suppose Strickler's managers believe that the inventory turnover can be raised to 9 times without affecting sales and cost of goods sold. What would Strickler's cash conversion cycle have been if the inventory turnover had been 9 for the year?
e. What would Strickler's total assets turnover have been if the inventory turnover had been 9 for the year?
f. What would Strickler's ROA have been if the inventory turnover had been 9 for the year?