Question

Tiger Ltd. is a manufacturer of cement. The Annual Accounts of the
company revealed the information as follows:
1) Customers were allowed three months credit period.
2) Wages are paid after 15 days when they become due.
3) Advertising expenses are paid 6 months in advance.
4) Manufacturing expenses are paid after a month.
5) Suppliers of manufacturing items allows one month's credit
6) Administrative expenses are paid with an average time lag of
one month.
7) The cash balance is Rs. 50,000.
8) Finished goods are kept in stock for one and half months
whereas raw material stock is kept for two months.
9) Contingency margin is 10% and other details are as follows:
(Rs. In lacs)
Sales
20.00
6.00
6.00
Raw materials
Manufacturing Expenses
Wages
Administrative Expenses
Advertising Expenses
4.80
2.40
1.00
Gross profit is 20% on sales. Estimate the working capital
requirement of the company.​

Answer 1

Answer:

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