Prepare working capital forecasting statement of company
Corporate Finance
A company is currently operating at 80% of its capacity producing 48,000 units per year at the following Cost Price structure:
Rs. per unit
Materials
5.00
Labour
3.00
Overheads (including depreciation of Rs. 500 per week)
2.00
Selling Price
12.00
Other information:
80% of sales are made on credit and 40% of purchases are made in cash.
Materials are kept in store for 6 weeks, the processing time is 8 weeks and the finished goods are stored in godown for 90 days.
Debtors are allowed a credit period of 10 weeks and a credit period of 45 days is received from the creditors.
Lag in payment of wages and overheads are 3 weeks and 15 days, respectively.
Prepare the Working Capital forecasting statement of the company.
