Q1.

(a) The following information is available for Ms. XYZ Ltd.: (`. 000)

Average stock of raw materials and stores 400 Average WIP inventory 600 Average finished goods inventory 360 Average accounts receivable 600 Average accounts payable 360 Average raw materials and stores purchase on credit and consumed per day 20 Average WIP value of raw materials committed per day 25 Average cost of goods sold per day 36 Average sales per day 40

You are required to calculate:

(i) Duration of raw material stage

(ii) Duration of WIP stage

(iii) Duration of Finished goods stage

(iv) Duration of accounts receivable stage

(v) Duration of accounts payable stage, and

(vi) Duration of operating cycle.

(b) Following particulars have been taken from ABC & Company:

Particulars

Raw Material consumed during the year Average stock of Raw material Work-in-Progress inventory

Finished Goods

Average W-I-P inventory

Average Finished goods held in stock Average collection period from debtors Average credit period availed

No of days in a year

Required: Calculate Net Working capital?

Amounts (Rs.)

12,00,000 100,000 10,00,000 16,00,000 60,000 80,000

90 days 60 days 360 days