Current working capital cycle Sample Assignment
home > Sample Assignment > Finance Homework Assignment > Current working capital cycle
Using the following data, calculate the current working capital cycle for XYZ Ltd.
(Rs. in '000)
Sales 3,000
Cost of production 2,100
Purchases 600
Average raw material stock 80
Average work-in-progress 85
Average finished goods stock 180
Average creditors 90
Average debtors 350
Solution:
Operating Cycle of XYZ Ltd.
1. Raw material
Average Raw Material x 365 = 80 x 365
Total Raw Material 600
= 49 Days
2. Work-in-progress
Average Work-in-progress x 365 = 85 x 365
Total Cost of Production 2,100
= 15 Days
3. Finished Goods
Average Stock x 365 = 180 x 365
Total Cost of Production 2,100
= 31 Days
4. Debtors
Average Debtors x 365 = 350 x 365
Total Credit Sales 3,000
= 43 Days
5. Creditors
Average Creditors x 365 = 90 x 365
Total Purchases 600
= 55 Days
Net Operating Cycle = 49 days + 15 days + 31 days + 43 days - 55 days
= 138 Days - 55 Days = 83 Days
Current working capital cycle Sample Assignment
Illustration:Using the following data, calculate the current working capital cycle for XYZ Ltd.
(Rs. in '000)
Sales 3,000
Cost of production 2,100
Purchases 600
Average raw material stock 80
Average work-in-progress 85
Average finished goods stock 180
Average creditors 90
Average debtors 350
Solution:
Operating Cycle of XYZ Ltd.
1. Raw material
Average Raw Material x 365 = 80 x 365
Total Raw Material 600
= 49 Days
2. Work-in-progress
Average Work-in-progress x 365 = 85 x 365
Total Cost of Production 2,100
= 15 Days
3. Finished Goods
Average Stock x 365 = 180 x 365
Total Cost of Production 2,100
= 31 Days
4. Debtors
Average Debtors x 365 = 350 x 365
Total Credit Sales 3,000
= 43 Days
5. Creditors
Average Creditors x 365 = 90 x 365
Total Purchases 600
= 55 Days
Net Operating Cycle = 49 days + 15 days + 31 days + 43 days - 55 days
= 138 Days - 55 Days = 83 Days
Other Sample Assignments in Finance Homework Assignment :
| Time Value of money | Future Value of Annuity |
| Current working capital cycle | Operating Cycle |
| Receipt And Payments Method Of Preparation Of Cash | Equiyty Per Share |