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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

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