Formula for calculation of NET OPERATING CYCLE

RMCP = Average Raw Material Stock

- -----------------------------------------------------X 365
Total Raw Material Consumption
Average Work in Progress

WPCP = Average Work in Progress

---------------------------------------------- X 365
Total Cost of Production

FGCP = Average finished

----------------------------------------------------X 365
Total cost of goods sold

RCP = Average receivables

-----------------------------------------------------X 365
Total Credit Sales

Average Creditors
DP = -----------------------------------------------------------X 365
Total Credit Purchase

OC = RMCP + WPCP +FGCP +RCP – DP

365
NOC = -- -- -- -- -- -- -- - -- --
OC
 COST OF SALES
WORKING CAPITAL= -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -
NUMBER OF OPERATING CYCLE

Opening raw material + closing Raw

material
Average raw material stock = --------------------------------------------
2

Op stock of raw + purchase of raw material –

closing stock

Total raw material consumption = - -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

365

Opening wip + closing wip

Average work in progress = ----------------------------------
2

opening wip + raw material consumption +

manufacturing expenses-closing wip
Total cost of production = ---------------------------------------------------------
365

opening finish goods + closing finish goods

Average finish goods = -----------------------------------------------------
2

op finish goods + selling, administrative &

financing cost – cl finish goods
Cost of sales = -----------------------------------------------------------------
365

Current assets turnover = -----------------------

 opening + closing
Average receivables = - -- -- -- -- -- -- -- -- - -- --
2
opening + closing
Average payable =-- -- -- -- -- -- -- -- -- - -- -- -
2
credit
credit sales = ---------------
365

purchase
Credit purchase = -- -- -- -- -- -- -- -
365

Efficiency ratio

Sales
Working capital turnover ratio = -----------------------
Net working capital

Gross sales
Receivable turnover = ------------------------------------
Average account receivable

365
Debtor turnover = -- -- -- -- - -- -- -- -- --
Receivable turnover

Sales
current assets turnover = ----------------------
Current assets

Liquidity ratio
Current ratio = current ratio
---------------------------
Current liabilities

Current assets – inventory

Quick ratio = --------------------------------------------
Current liabilities
 Bajaj auto limited

Chairman Rahul bajaj

Vice chairman Madhur bajaj

Managing director Rajiv bajaj

Executive director Sanjiv bajaj

Registered office

Mumbai – Pune road

Akrudi
Pune
411035
Financial chart

Particulars opening closing

Raw material 60672.5 63980.5

Work in progress 220.6 347.5

Finished goods 3743.6 2873.2

Receivables (debtors)

Payable (creditors)

Raw material purchase

Manufacturing expenses 10937.0 11976.4

Selling and administrative 3031 3145

charges

Sales 96900 90497

Inventory 3388.4 3496.1

Current assets 1256.8 799.5

Current liabilities 12134.1 10432.5

Gross sales