Estimation of Working Capital Requirement

Current Assets Sales (10,000 units @ Rs.10 p.u) 100000

Inventory 18461.54 Less: Profit 20000
Receivables 15384.62
Cash 10000 Cost 80000
Gross WC 43846.15
Current Liabilities
Payable 6153.846
Net WC 37692.31
Annual Costs
Raw Material 140000 Sales 700,000
Direct Labour 245000
Overheads 105000
TC 490000

Estimation of Working Capital Requirement

(i) Inventories
(a) Raw material in stock 5385
(b) Work-in-progress
Raw material 10769
Direct Labour 9423
Overhead 4038 24231
(c) Finished Goods 28269
(ii) Customer (Debtor) 107692
Gross Working Capital 165577

Supplier (Creditor) 10769

Net working capital 154808
 Estimation of Working Capital Requirement
Current Assets
(i) Inventories
(a) Raw material 225000
(b) Work-in-progress
Raw material 112500
Labour 22500
O/H 33750 168750
( c) Finished goods 450000

(ii) Receivable 405000

(iii) Cash 100000
Gross Working Capital 1348750

Current Liabilities
(i) Materials payable 225000
(i) Outstanding Wages 30000
(ii) Outstanding O/H 135000
Total current liabilities 390000
Net Working Capital 958750
 Calculations

Production per annum 54,000 units

Production per month 4500 units

Per month
RM 225000
DL 90000
O/H 135000
Total Cost 450000 Cash Sales p.m 135000
Profit 90000 Credit Sales p.m 405000
Sales 540000
Estimation of Working Capital Requirement

Current Assets Monthly Sales (32,000 units @ Rs.10 p.u)

a. Inventory
a. RM 96,000 Costs
b. WIP RM
(i) RM 64000 Labour
(ii) Labour 24000 O/H (16,000 -4,000 per week)
(iii) Overhead 12000 100000
c. FG 136000
b. Debtor 300000
d. cash 25000
Gross working capital 657,000
Current Liabilities
a. Creditor 128000
b. O/H Payable 24000
Net working capital 505,000
Sales (32,000 units @ Rs.10 p.u) 320000 Cash sales 80000
Credit sale 240000
320000
128000
96000
00 -4,000 per week) 48000
Total Cost p.m 272000 Total cost PU 8.5