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    Palasso's Avatar
    Palasso Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Aug 10, 2012, 03:02 PM
    Finance
    The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the
    current ratio to equal the industry average, 2.70, without affecting either sales or net income.
    Assuming that inventories are sold off and not replaced to get the current ratio to the target level,
    and that the funds generated are used to buy back common stock at book value, by how much
    would the ROE change
    Curlyben's Avatar
    Curlyben Posts: 18,514, Reputation: 1860
    BossMan
    		  
    #2

    Aug 10, 2012, 03:42 PM
    What do YOU think.
    We're happy to HELP, but we won't do all the work for you..
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