A company has credit sales of $45 million per year, and cost of sales of $30 million per year. They have calculated working capital measures as follows :
Trade receivable days 40 days
Inventory days 30 days
Trade payable days 36 days
There are 360 days in a year.
What is the net investment in working capital?
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net working capital days are 34days.
11y ago#2shwezin18: That is not what the question (or laavanyaa) is asking!
Laavanyaa:
Average receivables = 40/360 x 45M = 5M
Average inventory = 30/360 x 30M = 2.5M
Average payables = 36/360 x 30M = 3M
So net investment in WC = 5M + 2.5M - 3M = $4.5M
Thank you!
11y ago#4You are welcome :-)
(In future, if you want me to answer questions then please ask in the F9 Ask the Tutor Forum :-) )
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