Ques 1: From the following data, calculate the average amount of working capital required for next year:

1. Average amount for Stock: a. Finished goods b. Raw material 2. Average credit given to customers: a. Inland Sales (6 weeks Credit) b. Export Sales (1.5 weeks credit) 3. Average time lag for the payment of Expenses: a. Payment to labor (1.5 weeks) b. Payment to Supplies (1.5 months) c. Rent and royalties (6 months) d. Clerical staff (0.5 months) e. Manager (0.5 months) f. Miscellaneous Expenses (1.5 months) 4. Payment in Advance: a. Sundry Expenses (Paid quarterly) b. Undrawn profit 5. Add 10% contingencies reserve. Ques 2: Calculate the amount of net working capital for the next year on the basis of following data: 1. Estimated cost per unit of production: Raw material Direct labor Overhead (Excluding depreciation) Total Cost 2. Selling price per units 3. Level of activity 4. Work in process (100% material, 50% conversion) 5. Finished goods 6. Credit allowed by the supplier 7. Credit given to customer 8. Payment of wages 9. Cash and bank balance 10. Reserve for contingencies 11. Raw material in stock Rs 80 Rs 30 Rs 60 Rs 170 Rs 200 104,000 units per year 02 weeks 04 weeks 04 weeks 08 weeks 1.5 weeks 25,000 10% 04 weeks

Rs 5,000 Rs 8,000 Rs 312,000 Rs 78,000 Rs 260,000 Rs 48,000 Rs 10,000 Rs 62,400 Rs 4,800 Rs 48,000 Rs Rs 8,000 11,000

Ques 3:
Following are the data for ABC company, you are required to prepare working capital requirement: 1. 2. 3. 4. 5. 6. 7. Annual Sales Cost of production (including Rs 120,000 depreciation) Purchase of raw material Monthly expenditure Estimated amount of opening stock Estimated amount of closing stock Inventory payment norms: a. b. c. 8. 9. Raw material Work in process Finished goods 02 months 0.50 months 01 months 1,440,000 1,200,000 705,000 30,000 140,000 125,000

Credit given by supplier is 0.5 months and credit given to customer 01 month Company received Rs 15,000 advance from customer on every sale

10. Minimum cash and bank balance Rs 35,000

Ques 4:
A company is selling goods at a gross profit of 20%. It includes depreciation as a part of cost of production. The following information is for 12 months period ending December 31, 2010. Calculate the working capital requirement of the coming period.

1. 2. 3. 4.

A safety of margin of 15% will be maintained. Cash is to held to the extent of 50% of the current liabilities There is no work in process and taxation Finished goods are value at manufacturing cost. Stock of raw material and finished goods are kept at one months requirement.

5. 6. 7. 8.

Sales at two month credit amounting to Rs 2,700,000 Raw material consumed (Suppliers credit for two months) Rs 675,000 Wages (paid at the last day of the month) amounting to Rs 540,000 Manufacturing expenses outstanding at the end of the year (Cash expenses are paid one month in arrear) Rs 60,000

9.

Total administrative cost (paid as above) Rs 180,000

10. Sales promotion expenses (paid quarterly in advance) Rs 90,000