Prepare Working Capital Requirement Forecast

access_time 2020-03-07T05:45:15.848Z face CA N Raja Case Study Solved

A company plans to manufacture and sell 400 units of a domestic appliance per month at a price of Rs 600 each. The ratio of costs to selling price are as follows:

Fixed overheads are estimated at Rs4,32,000 per annum.

The following norms are maintained for inventory management:

Raw materials                   30 days

Packing materials              15 days

Finished goods                  200 units

Work-in-progress              7 days

Other particulars are given below: 

(a) Credit sales represent 80% of total sales and the dealers enjoy 30 working days credit. Balance 20% are cash sales.

(b) Creditors allow 21 working days credit for payment.

(c) Lag in payment of overheads and expenses is 15 working days.

(d) Cash requirements to be 12% of net working capital.

(e) Working days in a year are taken as 300 for budgeting purpose.

Prepare a Working Capital requirement forecast for the budget year.

For Solution

https://youtu.be/PqKuAy6jfKo

For More Case Studies, Enroll Our Course

Financial Management A Complete Study

https://courses.carajaclasses.com/s/store/courses/description/Financial-Management-A-Complete-Study-Copy

PAPER 8 Financial Management For CA Inter

https://courses.carajaclasses.com/s/store/courses/description/FINANCIAL-MANAGEMENT-FOR-CA-INTER

Paper 10 Financial Management (Part 2)

https://courses.carajaclasses.com/s/store/courses/description/Paper-11-Financial-Management-Part-B-CMA-INTER--12-Month-

Do you know 

You can access your courses in our Mobile App as well as website. 

Install Our App Right Now 

https://play.google.com/store/apps/details?id=com.carajaclasses.courses  

Launch your GraphyLaunch your Graphy
100K+ creators trust Graphy to teach online
CARAJACLASSES 2022 Privacy policy Terms of use Contact us Refund policy