The Belgian Vandeputte Group has the following operating structure: sales = 100, raw materials used in the business = 30, direct production costs = 40, administrative costs = 20. Operating cycle: raw materials inventories = 15 days, length of production cycle = one month, inventories of finished products = 15 days. Payment terms: suppliers two months, customers one month, other costs paid in cash. Assuming zero VAT, calculate working capital in days of sales. The production cycle lasts one month, which means that in-progress inventories represent one month of raw materi-als and 15 days of production costs.

Exercise 1: Van de Putte Group	M
Sales	100
Raw materials used in the business	30
Direct production costs	40
Administrative costs	20
Operating
Raw materials inventories	15	days	Days by months
Length of production cycle	1	months	30
Raw materials	1	months
Production costs	15	days
Finished products inventories	15	days
Payments terms
Suppliers	2	months
Customers	1	months
	% of sales	Time taken to shift goods or payment period	Value in days of sales
Raw materials inventories	30%	15.0	4.5
Work in progress
Raw materials	30%	30	9
Production costs	40%	15	6
Finished products inventories	90%	15	13.5
Trade receivables	100%	30	30
Trade payables	-30%	60.0	-18.0
Total			45.0

Need 200 words explanation on what this calculation means.