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  • FM09-CH 31

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    Kritika Swaminathan
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    This document contains information about working capital finance, including: 1) Two methods for calculating maximum permissible bank finance and actual bank finance for a company with data on raw materials, work in progress, finished goods, accounts receivable, and other details. 2) Key details of a commercial paper issuance, including face value, discounted value, discount amount, fees, total cost, maturity period, and effective cost calculation. 3) Key for referenced textbook on financial management.

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    IM Pandey

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    This document contains information about working capital finance, including: 1) Two methods for calculating maximum permissible bank finance and actual bank finance for a company with data on raw materials, work in progress, finished goods, accounts receivable, and other details. 2) Key details of a commercial paper issuance, including face value, discounted value, discount amount, fees, total cost, maturity period, and effective cost calculation. 3) Key for referenced textbook on financial management.

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    © All Rights Reserved
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    37 views2 pages

    FM09-CH 31

    Uploaded by

    Kritika Swaminathan
    This document contains information about working capital finance, including: 1) Two methods for calculating maximum permissible bank finance and actual bank finance for a company with data on raw materials, work in progress, finished goods, accounts receivable, and other details. 2) Key details of a commercial paper issuance, including face value, discounted value, discount amount, fees, total cost, maturity period, and effective cost calculation. 3) Key for referenced textbook on financial management.

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    © All Rights Reserved
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    of 2

    Ch.

    31 Working Capital Finance

    CHAPTER 31 WORKING CAPITAL FINANCE Problem 1 Norms: RM WIP FG AR Production plan data: Raw material consumption Cost of production Cost of sales Sales PBF: Raw material WIP FG AR OCA Total Less: OCL WCG First method: Long-term funds MPBF (117 - 29) Second method: Long-term funds MPBF (117 44) Problem 2 (Rs lakh) 1500.00 11.25% 168.75 1331.25 0.50% 7.50 3.75 0.40% 6.00 186.00 120.00 42% Months 2.75 0.50 2.00 1.25 Rs lakh 173 238 280 291 Permitted (Rs lakh) 40 10 47 30 48 175 58 117 25% 75% 25% 75% 29 88 44 73 Actual (Rs lakh) 60 17 52 98 48 275 58 217

    139

    139

    A. Funds to be raised B. Discount C. Available cash [A - B] D. Stamp duty E. Issuing charges F. Rating charges G. Total cost [B + D + E+ F] H. Maturity (days) I. Effective cost of CP [(186/1331.25)x(360/120)]

    I. M. Pandey, Financial Management, 9th Edition, Vikas.

    Problem 3 (Rs lakh) 100.00 94.75 5.25 0.50 0.20 0.35 0.15 6.45 90.00 27%

    A. Face value B. Discounted value C. Discount [A - B] D. Stamp duty E. Issuing charges F. Rating charges G. Dealer's fee H. Total cost [C + D + E + F] I. Maturity (days) J. Effective cost of CP [(6.45/94.75) x (360/90)]

    0.50% 0.20% 0.35% 0.15%

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