short question 25

Question 4:- (3 x 5 = 15 Marks)

The following data apply to Omani’s Company:

Total Current Asset

800 (OMR Thousand)

Quick ratio

1.5 Times


1800 (OMR Thousand)

Current ratio

2 Times

Net Fixed assets

700 (OMR Thousand)

Financia Leverage Multiplier

1.6 Times

Net Profit Margin

8% (OMR Thousand)

Days Sales Outstanding (DSO)

35 days

Calculate the following:-

1.Return on Asset (ROA). And Return on Equity (ROE).

2.Selling Period and Inventory Turnover.

If Omani’s could reduce its DSO from 35 days to 30 days while holding other things constant, how much cash would it generate (Account Receviable)?

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