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Question

Refer the following summarized Balance Sheet of Roy Ltd. as on 31‐3‐2023:

Additional Information: Operating expenses for the year 2023 amounted to Rs. 15,50,000. Consider 365 days in a year.

Calculate Basic defense interval from the above information:

A 184 days Correct Answer Incorrect Answer
B 247 days Correct Answer Incorrect Answer
C 188 days Correct Answer Incorrect Answer
D 182 days Correct Answer Incorrect Answer

Solution

Basic defense interval = (Current Assets – Prepaid expenses – Inventories) / Daily Operating expenses 7,80,000/4247 =184 days Current Assets – Prepaid expenses – Inventories 10,50,000 - 2,50,000 –20,000 = 7,80,000 Daily Operating expenses= 15,50,000 /365 days = Rs 4247 per days

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