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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Working capital
Sir if;
Sales revenue;
T1: 10000
T2: 8000
T3: 6400
T4: 5120
And if the Q says that the Working capital of T0 will be 20% of T1 and in the rest of the Working capital will decrease in line with the sales revenue. Every year revenue is decreasing by 20%.
So will we calculate the working capital by taking incremental working capital like this:
T0: 10000 x 20% = (2000)
T1: 2000 – (2000x 80%)= 400
T2: 1600 – (1600 x 80%) = 320
T3: 1280 – (1280 x 80%) = 256
T4: (2000)+400+320+256 = 1024
Sir is my above above working capital calculation correct?
Yes, you workings are correct.
Thank you sir 🙂
You are welcome 🙂