MS-41

Management Programme

ASSIGNMENT
FIRST SEMESTER
2018

MS – 41: Working Capital Management

School of Management Studies

INDIRA GANDHI NATIONAL OPEN UNIVERSITY
MAIDAN GARHI, NEW DELHI – 110 068
 ASSIGNMENT

Course Code : MS-41

Course Title : Working Capital Management
Assignment No. : MS-41/TMA /SEM-I/2018
Coverage : All Blocks

Note : Attempt all the questions and submit this assignment on or before 30th April, 2018 to the
coordinator of your study center.

1. The annual figures of Alpha Ltd are as follows:

(i) Sales at home, at 1 month credit Rs. 12,00,000.
(ii) Export at 3 months credit, S.P. 10% below the home price Rs. 5,40,000.
(iii) Materials used, suppliers extend 2 months credit Rs. 4,50,000.
(iv) Wages paid, half month in arreas Rs. 3,60,000.
(v) Manufacturing expenses, paid one month in arreas Rs. 5,40,000.
(vi) Depreciation on fixed assets Rs. 60,000.
(vii) Administrative expenses, paid one month in arrear Rs. 1,20,000.
(viii) Sales promotion expenses, payable quarterly in advance Rs. 60,000.

Alpha Ltd. sells goods in the domestic market on a gross profit of 25%. It keeps one
month stock of raw materials as well as finished product and believes in keeping Rs.
1,00,000 available to it. You are required to calculate the working capital requirement of
the company, assuming 15% safety margin.

2. Give a complete overview of the different marketable securities that are available for
investments.

3. Select any financial Institution/ Organisation of your choice and obtain information about
the important components of its credit policy and the attributes that they take into
consideration while deciding the credit wortheness about its customers.

4. Describe the creation of Euro Money and Eurocurrency Markets? Discuss the factors
contributing to the growth of the Euromarkets.

5. ‘The Working Captal Module is divided into three additional parts beyond the investment
information presented in the Capital Investment (CI) module’. Discuss of objectives and
operation sequential operation of the working capital module. Discuss the objectives and
operation of each these three parts.