Hello everyone!
I've been stuck on how one can solve something like this.
If you look at the image, it shows the background info, and I would really appreciate some advice on how I can go about doing this.
Assuming that Person A is financing inventory with a working capital bank loan, if he can improve his inventory management system and effectively reduce Days to Sell inventory to avg 45 days, how much lower would the company's bank loan be then?
I just don't know how to find "how much lower" his bank loan would be. I have found the inventory turnover ratio and original days to sell, but how can I calculate the bank loan part?
Thank you!
I've been stuck on how one can solve something like this.
If you look at the image, it shows the background info, and I would really appreciate some advice on how I can go about doing this.
Assuming that Person A is financing inventory with a working capital bank loan, if he can improve his inventory management system and effectively reduce Days to Sell inventory to avg 45 days, how much lower would the company's bank loan be then?
I just don't know how to find "how much lower" his bank loan would be. I have found the inventory turnover ratio and original days to sell, but how can I calculate the bank loan part?
Thank you!
