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    Question

    Operating cycle: Raw material stock 45 days, WIP 15

    days, Finished goods 30 days, Debtors 60 days, Creditors 30 days. Working capital requirement for sales of ₹1,200L? (Assume 360 days)
    A ₹400L Correct Answer Incorrect Answer
    B ₹500L Correct Answer Incorrect Answer
    C ₹600L Correct Answer Incorrect Answer
    D ₹700L Correct Answer Incorrect Answer

    Solution

    Operating cycle = 45+15+30+60-30 = 120 days. Sales/day = ₹1,200L/360 = ₹3.33L. Working Capital = 120×3.33L ≈ ₹400L. Closest is a). Recalculate: COGS assumed 100% sales? If COGS=80% sales, then ₹2.67L/day, WC=320L. With given options, likely c) based on full sales.

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