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F9 revision mock exam

Forums › ACCA Forums › ACCA FM Financial Management Forums › F9 revision mock exam

  • This topic has 4 replies, 3 voices, and was last updated 8 years ago by John Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • June 3, 2015 at 1:37 pm #252459
    laavanyaa
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    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?

    June 3, 2015 at 2:44 pm #252476
    shwezin18
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    net working capital days are 34days.

    June 3, 2015 at 3:55 pm #252536
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 53169
    • ☆☆☆☆☆

    shwezin18: 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

    June 3, 2015 at 5:17 pm #252609
    laavanyaa
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    Thank you!

    June 3, 2015 at 6:46 pm #252673
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 53169
    • ☆☆☆☆☆

    You are welcome 🙂

    (In future, if you want me to answer questions then please ask in the F9 Ask the Tutor Forum 🙂 )

  • Author
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