Question
XYZ Ltd. Has obtained the following data concerning the average working capital cycle for other companies in the same industry: Raw material stock turnover 20
XYZ Ltd. 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 |
| 95 days |
Using the following data calculate the current working capital cycle for XYZ Ltd. And briefly comment on it.
| (Rs. In 000) |
Sales (all credit) | 6,000 |
Cost of Production | 4,200 |
Purchases (all credit) | 1,200 |
Average Raw material stock | 190 |
Average work in progress | 170 |
Average finished goods stock | 360 |
Average creditors | 150 |
Average debtors | 700 |
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