Reference no: EM132121059

The Belgian Vandeputte Group has the following operating structure: sales = 100, raw materials used in the business = 30, direct production costs = 40, administrative costs = 20. Operating cycle: raw materials inventories = 15 days, length of production cycle = one month, inventories of finished products = 15 days. Payment terms: suppliers two months, customers one month, other cost paid in cash.

Assuming zero VAT, calculate working capital in days of sales. The production cycle last one month, which means that in-progress inventories represent one month of raw materials and 15 days of production costs.