S.M Ltd had total sales of $400 000 in 2014 (70%of its sales are credit).The company's gross profit margin is 10%, its ending inventory is $80 000 and its accounts receivable is $25 000.What amount of funds can be generated by the company if it increases its inventory turnover ratio to 10.0 and reduces its average collection period to 20 days?

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The Answer of S.M Ltd had total sales of $400 000 in 2014 (70%of its sales are credit).The company's gross profit margin is 10%, its ending inventory is $80 000 and its accounts receivable is $25 000.What amount of funds can be generated by the company if it increases its inventory turnover ratio to 10.0 and reduces its average collection period to 20 days?

SM Ltd Had Total Sales of $400 000 in 2014