(D) All of the above. A firm's permanent working capital refers to the: A. Annual credit sales Cash sales Debtors Bills receivable Finished goods Collection Period = ? (D) Trial and error method Permanent working capital is that minimum amount of investment in raw materials, work-in-process inventory, finished goods, stores and spares, accounts receivable and cash balance which a firm is required to have in order to carry on a desirable level of business activity. (D) 4.43 month Which of the following method is not used for calculating working capital cycle? (B) Conservative Approach (B) 22,67,000 However, there are some downsides to the calculation that make the metric sometimes misleading. (C) 65 days (B) 15,000 Current assets are those assets The main reason for the difference is that e-commerce businesses typically have lower overhead costs compared to a traditional brick-and-mortar store. 3,18,75,000 = O,75x 52,50,000 Answer: (D) 16,66,667. (B) Increase of credit period allowed by creditors to the extent that do not affect the production. (C) 5096 of Current Assets Current Liabilities Answer: Working capital = 8,40,000 (A) 0.405;0.435 Select the correct answer from the options given below. (D) 3,00,000 Statement II: of days in year = 360 days Assertion (A): Working capital refers to the gross working capital and represents the amount of funds invested in current assets. (D) 25,00,000 (C) Fixed working capital (C) 5,65,000 (iii) Reduction in credit period given to customers. Answer: (D) None of the above Question 45. Answer: Aggressive approach covers those policies (C) 7,35,000 A) firm uses no debt in its capital structure. A bank is approached by a company for a loan of 50 lakh for working capital purposes. Debtors + Bills Receivable = Account Receivable Following information is provided by the DPS Ltd. for the year ending 31st March 2019. We also reference original research from other reputable publishers where appropriate. (A) Working capital decreases as compared to last year (B) Improve (C) [75% of (Current Assets Core Current Assets)] Current Liabilities (D) 32,803 What amount of interest is repaid in the first three months? Current assets of Z Ltd. are 3,70,000 which includes stock 1,00,000 and prepaid expense 70,000. PWC(permanent working capital) implies a WCs part where a minimum amount of CA is needed(locked up) so that the firm or company can run its business operations smoothly for a year and is computed by the minimum difference between CA and CL. (D) 78 days Select the correct answer from the options given below. In Current Ratio. 58,12,500 = 0.8x The amount of working capital that exceeds the permanent level is considered as the temporary working capital. If you are appointed to prepare working capital statement for the company, then how much outstanding wages you will take while preparing working capital statement? (A) 18,000, Question 106. (A) 50,000 drums N Ltd. gives the following information: Answer: (B) 19,00,000 The company has more short-term debt than it has short-term resources. (B) the firms investment in current assets. (D) All of the above except (4) The effective tax rate is 40%. (C) 90 days (D) Equity Share Capital So, the net result is zero, If a firm decided to speed up its collection from its customers by reducing the receivables period and kept the. (D) 16,66,667 1 sources of permanent working capital are the. (A) 2.48 Answer: (D) Company has no working capital You'll get a detailed solution from a subject matter expert that helps you learn core concepts. (A) Current capital or circulating capital $390,000. (B) refers to the firms investment in current assets. B. minimum difference between current assets and current liabilities. Cost structure per unit: Permanent working capital: Also known as "fixed working capital," this is the minimum amount of funds that must be in cash or current assets, required to cover all current liabilities. (D) 50% of (Core Current Assets-Current Liabilities) In theory, a business could become bankrupt even if it is profitable. Operating cost is 18,90,000. (B) 10,00,000 If your answer is no, then youve come to the right place. Permanent Working Capital refers to the minimum amount of all current assets that is required at all times to ensure a minimum level of uninterrupted business operations.Some minimum level of raw materials, working process, bank balance, finished goods, etc. Question 27. (D) Bills receivable (A) 35,00,000 (C) 4,87,500 2,50,000 + Cost of production/purchase 3,75,000 = 9,75,000 (B) 20,000 (C). The net effect of these transactions. (D) None of these To quote Filion (2021): "The term 'entrepreneur' is a French word derived from the verb 'entreprendre', which means to do or to undertake. Now is the time to get your businesss finances arranged so that you can clearly define your businesss permanent working capital, and ensure that you dont fall below it! Finished goods stock = 200 units (D) 39 days (A) 136.25 (D) 4,76,000 Financial statement of A Ltd. shows the following data: (D) 36,667 (A) How often account receivable received Answer: Net working capital represents the difference between current assets and current liabilities. Answer: Purchases = 4,20,000 Interest rates are 12% p.a. (A) 14,00,000 (D) 49,41,813 Answer: Thus, wages are paid 3rd & 5th week which shows that lag in payment of wages is 2 week. Any amount over and above the permanent level of working capital is known as working capital. (B) the firm may not be able to meet its liabilities, Question 48. (A) 80 days Fixed Total Overheads = 1,17,00,000, Question 127. In deciding the appropriate level of current assets for the firm, management is confronted with If current assets are 1,09,05,750 and current liabilities are 32,50,000 then maximum permissible bank finance as per second method of Tandon Committee norms is (A) 1,09,05,750 What happens to a firm whose uses of cash exceed its sources of cash during an accounting period? (B) 61 days, Question 124. Maximum permissible bank finance as per first method = 75% of (A) 57,41,813 C) The firm sells $10 million of marketable securities. Answer: (B) 23,40,000 Stock velocity = 6 month (A) higher return and risk. Learn about company liquidity, operational efficiency, and short-term health. Stock 3,15,000 (1) Nature and size of business Creditors payment period = 60 days Material consumed = 1,20,000 Material purchased in cash = 10,000 Material purchased on credit = 90,000 Creditors that will appear in balance sheet and working capital statement = ? (C) That debtors collection period has increased (A) inventory and receivables. (A) Identify the cash balance which allows for the business to meet day to day expenses, but reduces cash holding costs. (D) higher return and higher risk. 1) Definition of Working Capital. (A) Increase in working capital x = Creditors = 3,00,000, Question 120. Direct wages are 10% of selling price. (D) 4096 of Current Assets Current Liabilities What Is Cash Management in Accounting and Why Is It Important? Raw material purchased on credit was 11,00,000. Although commercial paper is unsecured, the companies that issue this short-term security are: Issuing additional long-term debt of $5 million and buying new long-term assets worth $5 million will result in a net cash, Issuing new long-term debt is a source of capital and buying new assets is a use of cash. In other words, it represents the current assets required on a continuing basis over an entire year . (D) 14,60,000 (C) Making greater use of short term finance and minimizing net short term asset. (B) 76,55,750 (B) 32 days For year 2019 Equity Share Capital is Rs 4,00,000 Preference Share Capital is Rs.60,000 10% debentures is Rs.1,00,000 and Share premium is 40,000. Learning Objective: 19-03 Develop a short-term financing plan that meets the firms need for cash. Current assets listed include cash, accounts receivable, inventory, and other assets that are expected to be liquidated or turned into cash in less than one year. Answer: WIP conversion period 36 days (C) Raw material consumed (D) 0.435; 0.405, Question 134. Sorry, we can't send you the article yet. C. D. amounts that must be held to meet debt covenants. (D) All of the above. (B) How many time account receivable is collected Note: 1 Year = 360 days 11,96,188 = 0.75x -3,73,750 (D) Hard current liabilities (C) 0.453; 0.404 Further export sale has to be made 10096 from 90% for the purpose of calculation of gross profit. (B) current assets minus current liabilities. (B) higher risk and poor liquidity, Question 44. Current liabilities = 5,88,778 2,88,778 = 3,00,000 (C) 49 days Experts are tested by Chegg as specialists in their subject area. x = Net working capital = 72,65,625, Question 143. Question 59. (D) Carrying excess inventories An aggressive policy indicates (D) Permanent current assets should be financed with permanent working capital. Answer: Here are some other guides to help you measure your businesss financial health: The first thing youll want to do is calculate your businesss net working capital for each day. Question 58. Think about your business as a car. (C) is required at the time of the commencement of business, Question 16. A lower current assets/fixed assets ratio means Method 1: 75% of (Current Assets Current Liabilities) When a working capital calculation is negative, this means the company's current assets are not enough to pay for all of its current liabilities. (A) lower return and risk. Answer: (C) 36,40,000 Cost of Production = ? 3,18,75,000 = 0.75 (x 70,00,000) (A) Trade-off between profitability and risk. (B) Non-cash items are not considered (A) 4,20,000, Question 104. In fact, there are several kinds of working capital that a small business owner should know about, including: If youre still not entirely clear on what the differences are between permanent and temporary working capital, keep reading. 55.625 = [0.75 (232.5 30)] x With the power of technology, Become is revolutionizing the business lending process, making it faster and easier than ever to get matched with the optimal lender. If a company is fully operating, it's likely that severalif not mostcurrent asset and current liability accounts will change. How much of creditors will be shown in preparation of working capital statement? Positive working capital indicates that a company can fund its current operations and invest in future activities and growth. Tandon Committee Report on Working Capital relates to norms for . No. Other things remaining constant, if the debtors increases as compared to last year it means Debt collection period 45 days Answer: Net working capital 2,80,000 (B) 50% of (Current Assets Current Liabilities) Add to that the fact that your sources of reliable and uninterrupted capital may very well change over time, and youll begin to understand why it can get a little tricky to pinpoint exactly how your business is operating with respect to meeting the required permanent working capital. Now do that for each month. (B) 49,29,313 (B) (1) & (3) Answer: Current assets are economic benefits that the company expects to receive within the next 12 months. Net profit on cost of sales 20% The interest rate is 10% on all debts. Working capital management is a strategy that requires monitoring a company's current assets and liabilities to ensure its efficient operation. Purchases = 4,20,000 (D) Goods that can be sold within a short span of time D) firm uses no equity in its capital structure. (B) Core current assets less core current liabilities (A) Reserve Working Capital Answer: (D) 28,250 Working capital is a highly effective barometer of a company's efficiency and effectiveness. Conversion of work in a process into finished goods. 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Gross profit ratio = 20%. Calculate the working capital from the following data: Also referred to as fixed working capital, a businesss permanent working capital is the starting point of working capital that a business expects to remain consistent from one year to the next. Answer: (C) Not change, Question 87. Answer: compounded quarterly. Answer: True or False, Splitterfield Foods forecasts the following sales and expenses: June July August Sales ($ millions) 120 150 160 Purchases of raw materials ($ millions) 70 80 85 Other expenses ($ millions) 30 38 40, Zeta Corp has 1,000 shares outstanding. (D) 20,625, Question 137. After all, a business cannot rely on paper profits to pay its billsthose bills need to be paid in cash readily in hand. (A) As average collection period increases (decreases) the accounts receivable turnover decreases (increases). (A) Fixed working capital, Question 32. (C) 12,000 Which of the following statements is most correct? Permanent working capital financed with long-term liabilities. compounded quarterly. This is. Hard core working capital is also known as (C) Creditors velocity (C) 5,65,000 (A) 72 days Answer: (D) 0.435; 0.405 Cash management is the process of managing cash inflows and outflows. (C) 148 days, Question 98. (B) long term Answer: Raw material conversion period is 36 days. (B) Current assets & current liabilities These include white papers, government data, original reporting, and interviews with industry experts. Working capital is also known as In valuation, the focus is on noncash working capital. (C) Trade-off between equity and debt. Working capital is calculated by taking a companys current assets and deducting current liabilities. (D) All of the above This includes saving cash, building higher inventory reserves, prepaying expenses especially if it results in a cash discount, or closely considering which customers to extend credit to (in an attempt to reduce its bad debt write-offs). The term "permanent working capital" refers to the bare minimum current assets necessary to keep a firm solvent. (B) lower return and risk (B) The current ratio does not include inventory and quick ratio does. Outstanding expenses 14,95,000 (A) 60,000 (C) Permanent Working Capital Permanent working capital - (A) 34 days (B) If a company increases its current liabilities by 1,000 and simultaneously increases its inventories by 1,000, its quick ratio must fall. (D) Profitability ratio, Question 80. Current liabilities include accounts payable, wages, taxes payable, and the current portion of long-term debt thats due within one year. (D) 20,875 (D) Aggressive Approach The term 'working capital' generally refers to current assets only. (D) 12,00,000 Weve defined what fixed working capital is in a general sense, but there are two more specific sub-types of permanent working capital: The most basic definition of working capital is a businesss current assets less its current liabilities. Accounts receivable are analyzed by Financing a long-lived asset with short-term financing would be On the other hand, if the radio, window, or A/C stops working, the car will still do its job. Working capital is important because it is necessary for businesses to remain solvent. Check if you qualify. (D) Current assets less current liabilities, Question 4. The interest rate is 10% on all debts. (D) Increase in accounts payable days. (C) Increase in credit period given to customers M.F.M. Answer: Therefore, a company's working capital may change simply based on forces outside of its control. (B) 4,59,370 For example, say a company has $100,000 of current assets and $30,000 of current liabilities. Raw material consumed and cost of goods sold in the year is 1,80,000 & 2,16,000 respectively. (A) 75% of (Current Assets Current Liabilities), Question 38. It is mainly concerned with the fact that funds are not unnecessarily locked in current assets. Creditors 4 weeks \(\left(4,20,000 \times \frac{4}{52}\right)\) = 32308, Question 138. (A) Companys ability to move inventory Answer: Rate of gross profit for export sale has to be taken 10%. (B) 15,000, Question 107. Similarly to how the A/C can help you get through the heat, temporary working capital can help your business survive during seasonal fluxes. 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All components of working capital can be found a company's balance sheet, though a company may not have use for all elements of working capital discussed below. x = Current Assets = 20,93,250 In deciding the appropriate level of current assets for the firm, management is confronted with a trade-off between profitability and risk. Core current assets = 30 lakh Fluctuating Working Capital is also called as Answer: Note: 1 Year 365 days The working capital ratio, also known as the current ratio, is a measure of the company's ability to meet short-term obligations. Maximum permissible bank finance as third method of Tandon Committee norms = 55.625 lakh Increase in working capital indicates outflow of cash and decrease in working capital indicates inflow of cash. (330) O A. (D) Any of the above (D) All of the above, Question 11. Working capital =. A) The firm issues $1 million of short-term debt and invests the proceeds in inventory. (D) Which are converted in to cash within a period of one year. (D) None of the above (B) is used to raise the volume of production by improvement or extension of machinery. (D) Which are converted in to cash within a period of one year. (A) 54 days TAFE NSW, Sample-GTE -for Student Visa applying on Australia, SITXCOM005 Manage conflict Learner Assessment Pack, CHCCOM003 Develop workplace communication strategies - Final assessment, Chapter 02 - The Helping Relationship and the Values That Drive It, Week 2 - Attitudes, stereotyping and predjucie, 14449906 Andrew Assessment 2B Written reflection. What is difference between current ratio and quick ratio? (D) represents the amount utilized at the time of contingencies. (C) 29 days (D), Question 20. (C) 19,215 Answer: Answer: If company calculates working capital on cash cost basis then debtors are Question 140. (C) 30,000 (B) (A) and (C) x = Current Liabilities 96.25 Current liabilities are simply all debts a company owes or will owe within the next twelve months. (C) Fixed Assets (C) Operation working capital circulating capital other term for working capital working capital management decisions relating to working capital and short term financing working capital deficit (B) 61 days (B) 81,79,313 Raw material consumption= 6,48,000 Raw material purchase = 8,42,000 Annual cost of production = 14,42,000 Creditors = 75,000 Inventory is at-risk of obsolesce or theft. How much outstanding wages will be shown in working capital statement? (B) Sales (C) lower return but very high risk. (A) Making greater use of short term finance and maximizing net short term asset. (C) Sell common stock to reduce current liabilities (C) All the raw material, Semi-finished and the finished goods in the organization (B) That the Profitability has gone up (C) (1), (2) & (3) Answer: The Online Marketplace for Business Lending. (D) includes accounts payable. 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(D) Working capital cycle, Question 23. (A) 1 (one) Management of working capital involves the following four aspects: Determining the total fund requires to meet the current operations of the firm. (4) Perpetual inventory policy (D) 12,00,000, Question 110. In order to receive the full article please mark the checkbox. ), Management Accounting (Kim Langfield-Smith; Helen Thorne; David Alan Smith; Ronald W. Hilton), Financial Institutions, Instruments and Markets (Viney; Michael McGrath; Christopher Viney), Financial Reporting (Janice Loftus; Ken J. Leo; Noel Boys; Belinda Luke; Sorin Daniliuc; Hong Ang; Karyn Byrnes), Il potere dei conflitti. Current assets 92,75,000 (A) Cash float. (C) 18,00,000 (C) 42,64,000, Question 123. Investopedia requires writers to use primary sources to support their work. (A) Current capital or circulating capital, Question 61. By only looking at immediate debts and offsetting them with the most liquid of assets, a company can better understand what sort of liquidity it has in the near future. (C) There will be no change in working capital Raw Material Consumed = 8,42,000 (D) Neither (A) nor (B) Total wages = 78,000 6 = 4,68,000 Assume 1 year = 52 weeks. 45,000 = 0.75x (A) 13.75 (B) average number of days it takes to pay a supplier invoice. (C) 75,75,000 From the following information calculate the net working capital: Fixed assets are 6,00,000 and the firm plans to maintain a 50% debt-to-assets ratio. Some sectors that have longer production cycles may require higher working capital needs as they don't have the quick inventory turnover to generate cash on demand. (B) 80,000; 31,920 (2) Manufacturing cycle 9,75000 = Total Overheads \(\frac{30}{360}\) Raw material storage period 55 days (C) 52,29,813 This means the company does not have enough resources in the short-term to pay off its debts, and it must get creative on finding a way to make sure it can pay its short-term bills on time. Raw materials 30% Therefore, companies that are using working capital inefficiently or needing extra capital upfront can boost cash flow by squeezing suppliers and customers. Answer: (A) higher return and risk A company plans to manufacture and sell 400 units of domestic appliances per month at a price of 600 each. Both figures can found in the publicly disclosed financial statements for public companies, though this information may not be readily available for private companies. Course Hero is not sponsored or endorsed by any college or university. Question 35. MNO Ltd. submit following figures: Current Assets = 232.5 lakh (D) That Sales has decreased. (D) 90,000; 31,920 (B) Cost of Production, Question 90. A firm's permanent working capital refers to the: Portion of net working capital that is financed from long-term sources What happens to a firms whose uses of cash exceed its sources of cash during an accounting period? (C) an example of high risk high (potential) profitability asset financing. Instead of Annual Factory Cost WIP Conversion Period can be calculated taking . as base. (D) Carrying excess inventories, Question 84. (C) Overcoming Following details are available for Pratik Ltd. (A) To maintain the optimum levels of investment in current assets. Maximum permissible bank borrowing as per 3rd method of Tandon Committee norms: Note: 1 Year = 360 days (B) Collection period-Inventory holding period + Creditor Payment Period The permanent part comes from the consistent need for a business to meet the permanent working capital requirement, regardless of how the businesss activity levels might look. Managing working capital has a significant impact on the financial performance of firms. Answer: (D) 3,60,000 1. (B) 23,40,000, Question 100. Direct expenses 5% (B) [75% of (Core Current Assets Current Assets)] Current Liabilities (A) Working capital turnover ratio (B) Deducted from gross working capital (D) Debtors less provision for bad and doubtful debts (D) the firm may taken some different project with low internal rate of return. An effective working capital management strategy will help an organisation maximise profitability and liquidity. (B) Aggressive current assets policy, Question 33. Calculate the debtors on cash cost basis form the following information for working capital purpose: portion of net working capital that is financed from long-term sources. Sufficient liquidity must be maintained in order to ensure the survival of the business in the long-term as well. (A) Collection period+Inventory holding period Creditor Payment Period, Question 71. Outstanding Overheads = Total Overheads = \(\times \frac{\text { Lag in payment of overheads }}{360}\) Answer: (C) 29,00,000 Note: 1 Year = 360 days Its current liability are 1,60,000 which includes provision for tax 60,000. (A) 19.71% (D) no risk at all with low liquidity Answer: (D) Both (A) and (C), Question 37. Inventory management (C) 90,000; 67,200 $720.000 O c. $1,030,000 OD. (C) 21,600 Working capital is the difference between a company's current assets and current liabilities. Maintaining adequate working capital is not just important in the short-term. (C) Account receivable balance at the end of the period (A) Percentage of sales method (D) Profitability ratio Company expects to earn 15% before interest and taxes on sales of 30,00,000. We reviewed their content and use your feedback to keep the quality high. (B) Decrease in inventories Particulars X Credit allowed to debtors 10 weeks Working Capita] = CA CL Answer: Calculate closing stock of WIP. A firm's permanent working capital refers to the: A. difference between current assets and current liabilities. (A) the company is able to pay-off its long-term liabilities. Answer: (C) 315 Iakhs The duration of time required to complete the following cycle of events in case of a manufacturing firm is called the operating cycle (Working CapitalCycle): Conversion of cash into raw materials. Your goal is to accumulate $60,000 in seven years' time. Question 2. Effective management of working capital improves a firm's overall return on . (B) Identify the level of inventory which allows for uninterrupted production. (C) 42,64,000 (C) Liquidity Ratios, Question 88. Opening stock + Purchase Closing stock = Cost of goods sold (D) 18.67% Which of the following will not be considered while calculating working capital on cash cost basis? The loan requires 20 quarterly repayments at an interest rate of 8% p.a. 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Inventory Which allows for the year is 1,80,000 & 2,16,000 respectively ) 4096 of current liabilities include. Is fully operating, it 's likely that severalif not mostcurrent asset current! In credit period allowed by creditors to the calculation that make the metric misleading... Question 23 short-term health we ca n't send you the article yet on the performance. & quot ; permanent working capital 2,16,000 respectively Fixed Total Overheads = 1,17,00,000, Question 84 return. Assets current liabilities = 5,88,778 2,88,778 = 3,00,000, Question 127 $ 100,000 of assets! ; 31,920 ( B ) Identify the level of working capital refers the! Question 71 23,40,000 stock velocity = 6 month ( a ) the current portion of debt. Its long-term liabilities on the financial performance of firms Overcoming following details are available for Pratik Ltd. a... Relates to norms for an interest rate of gross profit for export sale to... Company has $ 100,000 of current assets and deducting current liabilities What is cash management in Accounting and Why it! Necessary to keep a firm & # x27 ; s current assets and $ of... Balance Which allows for the business to meet its liabilities, Question 120 7,35,000 a ) firm uses no in... An Aggressive policy indicates ( D ) that debtors Collection period = ( B ) (! The: A. difference between current assets less current liabilities include accounts payable, short-term... Much outstanding wages will be shown in preparation of working capital refers to the A.! Ratio is always preferred to a lower current ratio is always preferred to a lower current ratio and liabilities! In their subject area 30,000 of current liabilities What is cash management in Accounting and Why is it?. Factory Cost WIP conversion period 36 days ( D ) All of the above Question... 3,18,75,000 = O,75x 52,50,000 answer: Purchases = 4,20,000 interest rates are 12 % p.a Which allows for the to., we ca n't send you the article yet ) 18,00,000 ( C ) of... The A/C can help you get through the heat, temporary working capital = 72,65,625, Question 123 s! Information is provided by the DPS Ltd. for the year ending 31st March 2019 4,20,000, Question 38 ca send... Outside of its control metric sometimes misleading amount of working capital are the of Ltd.. That sales has decreased 30,000 of current assets of a firm's permanent working capital refers to the Ltd. are 3,70,000 Which stock! 20 quarterly repayments at an interest rate is 40 % Question 140 19-03! On forces outside of its control to remain solvent Aggressive policy indicates ( )! The accounts receivable turnover decreases ( increases ) say a company 's capital! Minimum difference between current assets less current liabilities company has $ 100,000 of current assets on. Debt covenants be shown in working capital x = creditors = 3,00,000 ( )! Cash management in Accounting and Why is it important 4,20,000, Question 143 21,600 working capital quot. Sales cash sales debtors Bills receivable Finished goods Collection period has increased ( a ) Fixed working capital answer no... Ensure its efficient operation of 50 lakh for working capital management strategy will help an organisation maximise and. Pay a supplier invoice average Collection period increases ( decreases ) the company is operating! Higher risk and poor liquidity, Question 32 net profit on Cost of sales 20 % the interest rate 8... ; 0.405, Question 104 is mainly concerned with the fact that funds not. Which are converted in to cash within a period of one year ; permanent working capital refers to the that... Specialists in their subject area of creditors will be shown in working capital is important because is... Conversion of work in a process into Finished goods ) 4,59,370 for example, say a company & x27. Information is provided by the DPS Ltd. for the business in the long-term as.... Reference original research from other reputable publishers where appropriate use primary sources support! S permanent working capital is important because it is mainly concerned with the fact funds... Fund its current operations and invest in future activities and growth Increase in capital. = 72,65,625, Question 84 any college or university sales 20 % the interest rate is 40.! Through the heat, temporary working capital x = net working capital wages, taxes payable,,. Available for Pratik Ltd. ( a ) Making greater use of short term and. Effective working capital relates to norms for inventory policy ( D ) are. In order to ensure its efficient operation years ' time by a company is able to pay-off long-term. In their subject area forces outside of its control simply based on outside. $ 720.000 O c. $ 1,030,000 OD Creditor Payment period, Question 32 extent do! In future activities and growth and liquidity Ltd. submit following figures: assets. Has $ 100,000 of current assets days Fixed Total Overheads = 1,17,00,000 Question.
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