Question

Ram and Shyam who are willing to purchase business,have consulted you and one point,on which
you are asked to advise them,is the average amount of Working Capital which would need to be
employed in the first year's trading.
You are given the following estimates and requested to add 10% to your computed figure to allow
for contingencies:
Per annum
（a)Average Amount of Stocks:
Finished Goods
50.000
Raw Materials
80.000
（b)Average Credit given:
Home Sales 6 weeks
3,12,000
Export Sales 112 weeks
7.80.000
（e)Lag in Payment of Expenses:
Wages-112 weeks
26,00,000
Other expenses including Materials(one Month)
9,60,000

Answer 1

Answer:

Per annum

（a)Average Amount of Stocks:

Finished Goods

50.000

Raw Materials

80.000

（b)Average Credit given:

Home Sales 6 weeks

3,12,000Per annum

（a)Average Amount of Stocks:

Finished Goods

50.000

Raw Materials

80.000

（b)Average Credit given:

Home Sales 6 weeks

3,12,000

Export Sales 112 weeks

7.80.000

（e)Lag in Payment of Expenses:

Wages-112 weeks

26,00,000

Other expenses including Materials(one Month)

9,60,000.

Export Sales 112 weeks

7.80.000

（e)Lag in Payment of Expenses:

Wages-112 weeks

26,00,000

Other expenses including Materials(one Month)

9,60,000