Haberdash inc last year reported sales of 12 million and an


Haberdash, Inc. last year reported sales of $12 million and an inventory turnover ratio of 3. The company is now adopting an improved inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 7.5, while maintaining the same level of sales, how much cash will be freed up? Note: Use the textbook’s definition for inventory turnover as Sales/Inventory.

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Financial Management: Haberdash inc last year reported sales of 12 million and an
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