incorrect straight away 10 down votes

The following annual figures relate to XYZ Co., 36,00,000 Sales (at two months' credit) 9,00,000 Materials consumed (suppliers extend two months' credit) 7,20,000 Wages paid (1 month lag in payment) 9,60,000 Cash manufacturing expenses (expenses are paid one month in arrear) 2,40,000 Administrative expenses (1 month lag in payment) 1,20,000 Sales promotion expenses (paid quarterly in advance) The company sells its products on gross profit of 25%. Depreciation is considered as a part of the cost of production. It keeps one month's stock each of raw materials and finished goods, and a cash balance of 1,00,000. Assuming a 20% safety margin, work out the working capital requirements of the company on cash cost basis. Ignore work-in-process