The Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash
February 19th, 2023
The Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash flow cycle. Christie’s sales last year (all on credit) were $150,000, and it earned a net profit of 6%, or $9,000. It turned over its inventory 7.5 times during the year, and its DSO was 36.5 days. Its annual cost of goods sold was $121,667. The firm had fixed assets totaling $35,000. Christie’s payables deferral period is 40 days.