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in dec 20213 ques 3(Emile gonzalez) part c, how is amount of released fund calculated? thnx
Which part of the model answer is causing problems. It all seems to be set out plainly:
Receivables should be (30 days) 1600 x 30/365 = 131.5, actually are 260, so improvement could be 260 – 131.5 = 128.5
Payables: if paid after 40 days would be 1375 x 20/365 = 150.7, actually are 75, so extending period would increase cash be 75.7Total cash that could be generated by these measures is approx 204 (= 128.5 + 150.7)
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