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Working capital requirements

This query is : Resolved 

29 April 2015 hi,I have a doubt in working capital management.In many of the practice manual sums they have calculated debtors on cost of production and not on selling price, they have ignored profit element while calculating it.for example total cost-25 rupees profit- 10 rupees s.p- 35 rupees they have calculated on 25 rupees.why so?

29 April 2015 The working capital component in debtors will be excluding profit. The profit is the surplus element on which no amount is spent from working capital.

29 April 2015 because working capital means what exactly u requries.. Profit is a part of ur hard work, it doesnt need any source...

it is the reward of that over all cost... its neither an expense


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