Question

When a bank is assessing an MSME's working capital

Q: Answer-When a bank is assessing an MSME's working capital requirement using the operating cycle method, whi...

The operating cycle method for calculating working capital focuses on the time it takes for the business to convert its inventory into cash through sales and collections. Long-term loan repayments are not included in the operating cycle, as they are considered a separate financing consideration.

requirement using the operating cycle method, which of the following is NOT typically considered in the calculation?

A Time taken to convert raw materials into finished goods

B Time taken to collect payment from customers (receivables)

C Time taken to convert finished goods into cash

D Time taken to pay suppliers (creditors)

E Time taken to repay long-term loans

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When a bank is assessing an MSME's working capital

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