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Working Capital Questions-1
Working Capital Questions-1
Working Capital Questions-1
1. X and Y Ltd is desirous to purchase and has consulted you. You have to advise them
is the average amount of working capital which will be required in the first years
working.
Solution:
amount
Current assets: (Rs)
Stock of finished goods 5,000
Stock of stores, materials etc. 8,000
Debtors
Inland sales 36,000
Export sales 2,250
Advance payment for sundry exp. 2,000
Total current assets 53,250
Current liabilities:
Wages 7,500
Stocks, materials, etc. 1,385
Rent, royalties etc. 5,000
Clerical staff 2,583
Manager 200
Misc. 6,000
Total current liabilities 22,668
Working capital 30,582
2. Management of a company has called for a statement showing the working capital
needed to finance a level of activity of 70,000 units of outputs for the year. Cost
structure for the company’s products is as below:
3. The management of a company has called for a statement showing the working
capital needed to finance a level of activity of 1,04,000 units of outputs for the year.
Cost structure for the company’s products is as below: