£mSales revenue433.0Cost of sales240.0Average trade receivables86.0Average trade payables20.0Average inventories77.0Purchases210.0 Koch Engineering plc has produced the following information for its most recent financial year:(Click here to view the financial data.)Following a review of the working capital investment of the business, it was decided that liquidity could be improved if the following changes were made:1. An decrease in the average settlement period for trade receivables to 35 days.2. An increase in the average settlement period for trade payables to 50 days.3. A decrease in the average inventories turnover period to 55 days.Calculate the extra cash that the business should generate by implementing each of the proposed changes.(Enter the answes in £m, round to one decimal place.)...Trade receivables = £ mTrade payables = £mInventories = £ m

Financial ratios help to understand the accounting data in a summarised and condensed form. Average…

Answered: Koch Engineering plc has produced the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 3PB: The income statement comparison for Rush Delivery Company shows the income statement for the current...

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Jiang Ltd has recently produced its financial statements for the current year. The directors of the company are concerned that the return on capital employed (ROCE) has decreased from 14% last year to 12% for the current year.The following reasons were suggested as to why this reduction in ROCE has occurred. an increase in the gross profit margin a reduction in sales revenue an increase in overhead expenses an increase in amount of inventories held the repayment of a loan at the end of the year an increase in time taken for trade receivables to be paid Taking each of these 6 suggested reasons in turn, state, with reasons, whether each of them could lead to a reduction in ROCE ROCE = (EBIT/Sales Revenue) x (Sales revenue/Long term capital)
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