Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
ÎThat p proportion
p of the company’s
p y total
capital, which is employed in short term
operations
Realizing Cash
Procurement
Sales
of RM
Production of
Finished Goods
Procurement of Cash
RM
S&D
Wages & Mfg. Gen. Admn.
Costs Financial Costs
WIP Fi i h d G
Finished Goods
d
INVENTORY
CONVERSION PERIOD RCP
Î OC = ICP + RCP
Closing Receivables
ÎRCP =
Cost of sales per day
Closing Payables
ÎPDP = Cost of sales per day
■ Spontaneous financing
Trade credit and outstanding expenses
ÎMatching Approach
ÎC i Approach
ÎConservative A h
ÎAggressive Approach
VARIABLE
L CURRENT ASSETS S T SOURCES
F
e
I
v LONG N
e A
l N
TERM C
FIXED I
o CURRENT ASSETS N
f SOURCES G
A
s FIXED ASSETS
s TIME
e
Dr.tIrala 20 Financing Current Assets
Aggressive Approach
VARIABLE
L CURRENT ASSETS
e SHORT F
I
v TERM
N
e SOURCES A
l N
C
FIXED I
o LONG
CURRENT ASSETS N
f G
TERM
A SOURCES
s FIXED ASSETS
s TIME
e
t
Dr. Irala 21 Financing Current Assets
s
Working Capital Management
Days Weeks Months Annual Average
Current Assets
Finished Goods
Stores, material
Debtors (domestic)
Debtors (exports)
Ad P t F
Adv. Pmt. For sundry exp.
d
Current Liabilities
Current Liabilities
Wages
Stocks, Material
Rent, Royalties
Clerical Staff
Manger
Misc.
Net Working Capital
Current Liabilities
Current Liabilities
Wages 1.5 2 60 000 7 500
Stocks, Material 1.5 48 000 1 385
Rent, Royalties 6 10 000 5 000
Clerical Staff 0.5 62 000 2 583
Manger 0.5 4 800 200
Misc. 1.5 48 000 6 000
22 668
22 668
Net Working Capital 30 582
Per Unit Rs. Per anum
Raw Material 80 83 20 000
Direct labour 30 31 20 000
Overheads 60 62 40 000
Cost of Production 170 176 80 000
P fit
Profit 30 31 20 000
31 20 000
Selling Price 200 208 00 000
Cash Sales 52 00 000
Credit Sales 156 00 000
Current Liabilities
Creditors 30 6 93 333 RM
Wages 10 86 667 Direct Labour
Overheads 30 5 20 000
13 00 000
13 00 000
Net working Capital 42 28 333
Add: 10% Contingencies 4 22 833
46 51 167
Units Produced & Sold 1 00 000
Per Unit Rs. Per anum
Raw Material 42.40 42 40 000
Direct labour
Direct labour 15 90
15.90 15 90 000
15 90 000
Overheads 31.80 31 80 000
Cost of Production 90.10 90 10 000
Profit 15 90
15.90 15 90 000
15 90 000
Selling Price 106.00 106 00 000
Cash Sales
Cash Sales 26 50 000
26 50 000
Credit Sales 79 50 000
Current Liabilities
Creditors 4 3 26 154 RM
Wages 2 61 154 Direct Labour
3 87 308
3 87 308
Net working Capital 23 26 538
Add: 10% Contingencies 2 32 654
25 59 192
7000
6000
5000
Cost of Liquidity
4000
Cost of Illiquidity
Total Cost
3000
2000
1000
0
0.1 0.25 0.4 0.7 1 1.5 2.5
Int on STL @
Month WC ST Loan
1 33%p m
1.33%p.m
1January 72.65 72.65 0.966
2February 58.13 58.13 0.773
3March 29 06
29.06 29 06
29.06 0 386
0.386
4April 24.22 24.22 0.322
5May 33.9 33.9 0.451
6June 43.6 43.6 0.580
7July 58.12 58.12 0.773
8August 72.66 72.66 0.966
9September 82.3 82.3 1.095
10October 87 19
87.19 87 19
87.19 1 160
1.160
11November 92.02 92.02 1.224
12December 87.17 87.17 1.159
Total 741.02 741.02 9.86
p
9Total capital 432 450 468 equals total assets
q