Calculate average working capital requirement

Assignment Help Corporate Finance

Reference no: EM13181836

GX Ltd is about to commence a new business for which you are asked to calculate its average Working Capital Requirement for the first year with the help of the following information:

	Average Credit Period	Estimated Amount for 1st year (Rs.)
Purchase of Raw Materials	6 weeks	26,00,000
Wages	1.5 weeks	19,50,000
Overheads:
Rent & rates	6 months	1,00,000
Salaries to staff	1 months	3,60,000
Insurance	3 months	2,00,000
Selling expenses	2 weeks	4,55,000
Other Overheads	2 months	6,00,000
Sales:
Cash	-	1,40,000
Credit	7 weeks	65,00,000
Average amount of stock & WIP	-	3,00,000
Average amount of undrawn profit	-	3,10,000

Sales are made at an even rate for the year. An overdraft limit of Rs. 1,50,000 has been arranged with the banker.

Reference no: EM13181836

Questions Cloud

State what is the solubilty at an elevation : what is the solubilty of O2 at an elevation of 12, 000 ft where the atmospheric pressure is 0.657 atm? Assume the temperature is 25 degrees celsius, and that the mole fraction of O2 in air is 0.209 at both 12, 000 ft and at sea level.

Estimate the maximum possible error in the calculated area : The radius of a circular disk is given as 26 cm with a maximum error in measurement of .2 cm. Use differentials to estimate the maximum possible error in the calculated area of the disk.

Find the thickness : The outside of a picture frame measures 19in by 10in. 56in^2 of the picture shows. find the thickness.

What is the profit-maximizing price for a bag : The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.8 million on these items, which were purchased in competitive input markets. Based on..

Calculate average working capital requirement : GX Ltd is about to commence a new business for which you are asked to calculate its average Working Capital Requirement for the first year with the help of the following information:

How fast is the angle of elevation of the rocket increasing : When a rocket is 2 kilometers high, it is moving vertically upward at a speed of 300 kilometers per hour. At that instant, how fast is the angle of elevation of the rocket increasing, as seen by an observer on the ground 5 kilometers from the laun..

State the effect of temperature on gases confined : the effect of temperature on gases confined to small volumes. What is the pressure of 3.40mol of gas D measured at 251 C in a 1.75-L container assuming real behavior?

Prepare a working capital requirement forecast statement : Prepare a Working Capital Requirement forecast statement for the coming year and assume that the production is carried on evenly throughout the year, and wages and overheads accrue similarly. A time period of 4 weeks is equivalent to a month.

Determine the optimal two-part pricing strategy : You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 250 - 40Q, and your cost function is C(Q) = 10Q. a. Determine the optimal two-part pricing strategy. Per-unit fee: $ Fixed fee: $

User Account

All Pages