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    Aravinthan INSAF SmartClass
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    This document summarizes key financial metrics and calculations for Aapenx Inc. It shows that the company's current annual sales are $12 million with a cost of goods sold of 75% of sales. The current average inventory is $800,000 and turns over 11.25 times per year or every 32.44 days. The current cash conversion cycle is 19 days. Reducing inventory days to 29 would lower the average inventory to around $714,853, a reduction of $85,146. Prior to an announcement, the company's stock price was $80 per share but the target price is $20 per share, which would value the company's 30 million outstanding shares at $600 million.

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    This document summarizes key financial metrics and calculations for Aapenx Inc. It shows that the company's current annual sales are $12 million with a cost of goods sold of 75% of sales. The current average inventory is $800,000 and turns over 11.25 times per year or every 32.44 days. The current cash conversion cycle is 19 days. Reducing inventory days to 29 would lower the average inventory to around $714,853, a reduction of $85,146. Prior to an announcement, the company's stock price was $80 per share but the target price is $20 per share, which would value the company's 30 million outstanding shares at $600 million.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    14 views3 pages

    Takeaway Questions & Answers

    Uploaded by

    Aravinthan INSAF SmartClass
    This document summarizes key financial metrics and calculations for Aapenx Inc. It shows that the company's current annual sales are $12 million with a cost of goods sold of 75% of sales. The current average inventory is $800,000 and turns over 11.25 times per year or every 32.44 days. The current cash conversion cycle is 19 days. Reducing inventory days to 29 would lower the average inventory to around $714,853, a reduction of $85,146. Prior to an announcement, the company's stock price was $80 per share but the target price is $20 per share, which would value the company's 30 million outstanding shares at $600 million.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    Aapenx Inc.

    Sales ($) 12,000,000.00

    COGS 75%
    Avg Inventory ($) 800,000.00

    COGS ($) 9,000,000.00

    Inventroy Turn Ratio Times COGS/Avg Inventory

    11.25

    Inventory Turnover days 365/Inventory Turnover Ratio

    Inventory Turnover Days 32.44

    Exisitng
    Cash Conversion Cycle = Inventory Days + Debtor/Collection Days- Payables Days
    (32+32-45)

    CCC 19

    Reduce the days by 5 - CFO

    CCC 14

    New Cycle
    Cash Conversion Cycle = Inventory Days + Debtor/Collection Days- Payables Days
    14 (X)+30-45
    X -29

    29 Days
    New Inventory Turnover Days

    Inventory Days 29
    No of Days in Year 365

    In a year How many times


    inventory gets converted 12.59
    Inventroy turn over Ratio COGS/Avg Inventory (X)
    12.59 9000000/X

    AVG Inventory ($) 714,853.06

    Reduction By 800000-714,853.06

    Reduction By 85,146.94
    Exchange Stock 1:04

    Prior
    Announcement
    Share Price ($) 80.00

    Value to Target
    Price per share ($) 20.00

    Balance Shares 30,000,000.00

    Share Value ($) 600,000,000.00

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