Professional Documents
Culture Documents
management
working capital
1 operaing cycle
inventory/(sales/365)
days receivables
EXAMPLE
10
sales
daily sales
10000*15
daily purchases
150000
3333.33
100000
2857.143
own funds
borrow
cost of working capital
receivables
days inventory
35
10
days payable
receivables
inventory
15
payables
33333.33
116666.6
1500000
42857.145
working capital
107142.74
own funds
cod
cost of working capital
10%
10714.27
coe
problem no.1
days inventory
days receivables
operating cycle
problem no.3
inventory
sales
days inventory
receivables
dso
problem no.5
current
previous
raw material
wip
fg
346500
245800
324500
365800
247600
300240
total inventory
receivables
916800
265440
913640
246870
sales
daily sale s
days inventory
dso
op cycle
2125450
5823.150685
157.440542
45.58357054
203.0241125
2089790
5725.452
159.5752
43.11799
202.6932
6
raw material
wip
fg
total inventory
current
449280
245800
324500
1019580
previous
438960
247600
300240
986800
sales
receivables
payables
purchases
2125450
265440
89000
1154000
2089790
246870
76000
1246000
days inventory
dso
days payable
175.0907808 172.3532
45.58357054 43.11799
28.14991334 22.26324
CCC
192.524438
9 sales
receivable
193.208
5820000
1825000
Dso
reduced dso
114.4544674
109.4544674
new receivables
savings in receivables
1745273.973
79726.0274
current
1396468
764004
1008623
3169095
previous
1436494
810269
982534
3229297
6606401
825050
276633
3586900
6838825
807881
248710
6838825
45.58355601
18099.72877
175.0907453
28.14994703
43.11802
18736.51
172.3532
13.27409
3717512
3788468
RIM
WIP
FG
total inventory
1396468
764004
1008623
3169095
11 RIM
WIP
FG
total inventory
annual sales
receivables
payables
annual purchases
dso
daily sales
days inventory
days payable
12
sales
receivables
7134913
1008270.731
276633
3586900
dso
daily sales
days inventory
days payable
51.58
19547.70707
162.1210605
28.14994703
3900732.731
18
SALES
DSO
RECEIVABLES
PROFIT IN SALES
CURRENT
PROPOSED
1255000 1380500
35
120342.5
131775 144952.5
because we are making more profits let us accept the proposed change
2
30
14
payables period
44
1500000
5900000
92.79661
2000000
123.7288
36
IMPORTANT
11%
8769.863
PROPOSED
DSO
PAYMENT WITHIN 10 DAYS
PAYMENT WITHIN 37 DAYS
0.4
0.6
502000
828300
1330300
OVERALL
10
37
problem no.19
current
sales
inventory
days inventory
int. on w.c.
proposed
1500000
1500000
250000
225000
60.83
54.75
26250
23625
4567000
1143560
91.39465732
35000
5480400
1372272
101.3946573
42000
445282.5
114356
295926.5
534339
137227.2
355111.8
555000
45
68424.65753
0
555000
666000
28.5
52002.73973
333000
333000
41625
0
6329.81
49950
3330
4810.25
4567000
2535000
5023700
2788500
30
208356.1644
45
343787.6712
savings
25000
2625
problem no.20
sales
ar
dso
bad debts
profit on sales
int. on w.c
net profit
problem no.21
sales
dso
ar
discount on sales
non discount sales
profit on sales
discount
cost of w.c
net profit
problem no.22
sales
purchase
days payables
payables
consequent to the change in policy as well as the change in volume , the investment is working capital
will come down by 135431.5
problem no.23
dso
sales
receivables
inventory
purchases
payables
discount sales
non discount sales
payables
days payables
discount
bad debts
65780000
2456000
1056000
3567000
357000
78936000
5493080.548
1267200
4280400
0
-28943200
94723200
65780000
357000
36.53069807
428400
36.53069807
0verall
percentage
10
0.3
32
0.7
25.4
0
175000
profit in sales
interest on w.c
overall
problem no. 27
sales
dso
receivables
profit on sales
interest on w.c
overall
5600000
35
536986.3
3570000
10
97808.2
481600
59068.5
422532
307020
10758.9
296261
problem no.26
present
proposal 1
sales
46500000
expenses
24540000
dep.
1287500
proposal 2
dso
10
30
pbit
int
pbt
taxes
pat
20672500
438350
20234150
9070245
11163905
receivables
1273972.603
problem no.30
sales
dso
receivables
10567000
45
1302781
7396900
25
506636
136791.986
317010
53196.88356
73969
profit on sales
845360
591752
overall
391558
464586
cost of wc
bad debts
yes
working capital
percentage
70%
30%
16