Finance, working capital management

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Abhijeet Jain (Querist)
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01 June 2021 ☰ Home Experts Students FM - Problem on Working Capital venkatraj.c 09 December 2008 The following data relating to a consumer goods manufacturing firm is available for the year ended 31st MArch. No of days R.M. in storage - 30days, debtors collection Period - 30days , COnversion Process Period- 12 days, Finished Goods Storage Period - 45 days, Average Credit Period from suppliers - 50 days, Advance payment to Creditors - 5 days, Total Cash Opertaing Expenses per annum - 600 days, 60% of the TOTAL Cash Operating Expenses are due to RAW MAterial. Required : 1) Determine the average Cash Working Capital needed by the firm at any Point of time during the year assuming that the firm wants to carry a cash balance of Rs. 10 Lakhs at all the time. 2) Compute the working Capital Turnover Rate for the Year. Pls solve me the prblem with required Notes regards Abhi

Aashok Kumar Sharma online

Aashok Kumar Sharma

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07 July 2024 The average Cash Working Capital needed by a firm is approximately Rs. 10,18,847.2. To calculate this, the firm needs to calculate the Working Capital Cycle (WCC) and Cash Conversion Cycle (CCC) using the provided data. The total cash operating expenses for raw material are 60% of the total, and the average Cash Working Capital is calculated as Rs. 365 times the total expenses for raw material. This helps in understanding the firm's financial dynamics and liquidity management.

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