(Solution) - Based on comparisons Between SEC s days sales outstanding DSO -(2025 Original AI-Free Solution)

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Based on comparisons Between SEC?s days sales outstanding (DSO) and inventory turnover ratios with the industry average figures, does it appear that SEC is operating efficiently with respect to its inventory and accounts receivable? Suppose SEC were able to bring these ratios into line with the industry averages and reduce its SGA/Sales ratio to 33%. What effect would this have on its AFN and its financial ratios? What effect would this have on free cash flow and ROIC?
Betty Simmons, the new financial manager of Southeast Chemicals (SFC), a Georgia producer of specialized chemicals for use in fruit orchards, must prepare a financial forecast for 2010. SEC?s 2009 sales were $2 billion, and the marketing department is forecasting a 25% increase for 2010. Simmons thinks the company was operating at full capacity in 2009, but, she is not sure about this. The 2009 financial statements, plus some other data, are shown below:
A. 2009 Balance sheet (Millions of Dollars)