what is the amount he would need to cut inventory levels by?
and what would be the new level of inventory
What Is The Amount He Would Need To Cut Inventory Levels By And What Would Be The New Level Of Inventory 1 (17.27 KiB) Viewed 29 times
What Is The Amount He Would Need To Cut Inventory Levels By And What Would Be The New Level Of Inventory 2 (68.73 KiB) Viewed 29 times
Cash Receivables Inventories Total CA Net fixed assets Total assets $ 14,000 70,000 280,000 $364,000 126,000 $490,000 Accounts payable Other current liabilities Total CL Long-term debt Common equity Total liab, and equity $ 42,000 $ 70,000 140,000 28,000 280,000 $490,000
Sales $280,000 Net income $21,000 Kruger's new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.75, without affecting either sales or net income. 1. What would Kruger's new level of current assets be in order for the firm to reach the desired Current Ratio? Assume current liabilities stay the same. 2. In order to reach the target current asset level you just found in question 1, what is the amount Kruger would need to cut inventory levels by? And, what would be the new level of inventory for Kruger?
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