1. Chandru Limited has obtained the following data concerning the average working capital cycle for other companies in the same industry.
Raw material stock turnover - 20 days
Credit received - 40 days
Work in progress turnover - 15 days
Finished goods stock turnover - 40 days
Debtors collection period - 60 days
Total - 95 days
Using the following data, calculate the current working capital cycle for XYZ Ltd., and briefly comment on it.
Credit sales - 5000
Total cost of sales - 4000
Cost of production - 3000
Purchases - 3500
Total raw material consumed - 600
Average raw material stock - 800
Average work in progress - 85
Average finished goods stock - 180
Average creditors - 700
Average debtors - 350
1. Chandru Limited has obtained the following data concerning the average working capital cycle for other companies in the same industry.
Raw material stock turnover - 20 days
Credit received - 40 days
Work in progress turnover - 15 days
Finished goods stock turnover - 40 days
Debtors collection period - 60 days
Total - 95 days
Using the following data, calculate the current working capital cycle for XYZ Ltd., and briefly comment on it.
Credit sales - 5000
Total cost of sales - 4000
Cost of production - 3000
Purchases - 3500
Total raw material consumed - 600
Average raw material stock - 800
Average work in progress - 85
Average finished goods stock - 180
Average creditors - 700
Average debtors - 350
