Question
A manufacturing unit has Raw Material holding of 60
days, WIP of 30 days, Finished Goods of 45 days and Receivables of 75 days. Payables period is 60 days. Annual cost of production is ₹360 crore. What is the Working Capital requirement based on Operating Cycle?Solution
Operating Cycle = 60 + 30 + 45 + 75 – 60 = 150 days Daily cost = 360 / 365 ≈ 0.986 WC ≈ 0.986 × 150 ≈ ₹148–150 crore
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