Projected Statement of Working Capital of M& Co.

Amount in Rs.
Particulars Year 1 Year 2 Working
CA
Stock of 3,00,000 4,00,000 Formula: Stock of RM =
RM [ RM consumed in units *cost /unit *RM holding
period] / 12 months.
Working:
Yr1: 15,000 units * Rs.80 *3 months / 12 months
Yr2: 20,000 units * Rs.80 *3months/12 months
Stock of FG 1,52,000 4,33,143 Formula =
[ opening stock of FG @ avg cost + COP – Closing stock
of FG @ average cost] / 12 months
Cost of production(COP) =
Cost of RM consumed + Labour cost + Overhead exps
( Fixed mfg + admn exps).
Working:
Cost of goods sold Year 1 Year 2
(15,000units) (20,000units)
Cost of RM 12,00,000 16,00,000
consumed
@Rs80/unit (a)
Labour 6,00,000 8,00,000
@Rs.40/unit(b)
Overhead @ 4,80,000 4,80,000
Rs.20/unit on
24,000 units ©
COP = (a)+(b)+(c) 22,80,000 28,80,000
=(d)
Add: Opg stock _ 1,52,000
@average cost.(e)
Less: Closing stock 1,52,000* 4,33,143**
@ average cost (f)
Calculation of
closing stock (in 0 +15,000 1,000 +20,000
units): -14,000 = -18,000 =
[Opg stock + 1,000 3,000
purchases – Sales] =
Closing stock
 Cost of Closing 4,33,143
stock= 1,52,000
[ avg cost of opg
stock +
COP]*closing stocks
in units/No of units
produced.

Yr.1 = [0+22,80,000]
*1,000/15,000
Yr.2 =
[1,52,000 +
28,80,000]*3,000/2
1,000

Debtors 1,90,617 2,32,571 Formula: COS * credit sale norm / 12 months.

Yr 1 Yr2
Cost of goods 21,28,000 25,98,000
produced
Add: Selling 1,12,000 1,44,000
exps:
Variable
@Rs.8/unit
Yr.1: 14,000
units.
Yr2:18,000 units
Add: Fixed exps 48,000 48,000
@Rs.2/ unit
(24,000 units)
Cost of goods 22,88,000 27,90,000
sold

Desired 20,000 20,000

Cash
holding
GWC or 6,62,667 10,85,714
TCA –(A)
 Current Yr1 Yr2 Working
Liabilities
Creditors 2,50,000 2,83,833 Formula: [ Closing stock of Credit purchases @ average
for RM cost + cost of RM consumed – opening stock of credit
suppliers purchases] * credit purchases norm / 12 months.
=(a)
Yr.1: [ Rs.3,00,000 + 12,00,000 – 0] * 2 months / 12
months
Yr2: [ Rs.4,00,000 + 16,00,000 – 3,00,000] * 2months /
12 months.
Creditors 1,03,333 4,06,000 Formula: [ Labour exps + Fixed exps + Selling exps] *
for Credit norm / 12 months.
expenses Yr1: [6,00,000 + 4,80,000 + 1,60,000]*1 month/12
=(b) months.
Yr2: [8,00,000 +4,80,000 + 1,92,000]*1month/12
months.
CL=(a) + (b) 3,53,333 4,06,000
NWC = 3,09,334 6,79,714
GWC - CL