Question

Working capital cash flow. Tires for Less is a franchise of tire stores throughout the greater Northwest. It has projected the following unit sales and costs for each tire type for the next our months in the popup window:驧. The company policy is to have the next month's anticipated sales for each tre type in the warehouse. Shipments are made to the various stores throughout the Northwest from the central warehouse. Calculate the monthly increase or decrease in cash flow for inventory for the first three months of the year given that an increase in inventory is a use of cash and a decrease in inventory is a source of cash. Snow Tires: What is the change in working capital for January? (Round to the nearest dollar) What is the change in working capital for February? 5]) (Round to the nearest dollar.) What is the change in working capital for March? sD(Round to the nearest dollar.) Rain Tires: What is the change in working capital for January? (Round to the nearest dollar.) Enter your answer in each of the answer boxes.

Answer 1

To calculate the monthly increase or decrease in working capital for inventory, we need to determine the change in inventory for each month.

Step-by-step explanation:

To calculate the monthly increase or decrease in working capital for inventory, we need to determine the change in inventory for each month. A decrease in inventory is a source of cash, while an increase in inventory is a use of cash.

For the Snow Tires:

1. Calculate the change in inventory for January: Expected sales for January minus the inventory level at the end of December.
2. Calculate the change in inventory for February: Expected sales for February minus the inventory level at the end of January.
3. Calculate the change in inventory for March: Expected sales for March minus the inventory level at the end of February.

Repeat the same steps for Rain Tires to calculate the change in working capital for each month.