Net working capital with a bank loan


Solznick Inc. had the following data for 2008 (in millions). The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. The company's finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have increased?

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Accounting Basics: Net working capital with a bank loan
Reference No:- TGS073143

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