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Company B produces wooden toys. On the starting of every month, they purchase 50,000TL worth of raw materials from a wholesaler. They pay on a
Company B produces wooden toys. On the starting of every month, they purchase 50,000TL worth of raw materials from a wholesaler. They pay on a 2 months term to this supplier. The production + Inventory cycle is one month, which at the end they sell the batch for 100,000 TL and get paid in 90 days. At the end of each month they also pay 20,000 TL for labor and other production expenses. What is the cash flow cycle of this business? How much money does it need for one cycle? Raw Material Labor Sale -Total
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