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Working capital

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Working capital

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 14, 2019 at 3:22 pm #555908
    aadil1234
    Member
    • Topics: 75
    • Replies: 104
    • ☆☆

    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?

    December 14, 2019 at 3:34 pm #555911
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    Yes, you workings are correct.

    December 14, 2019 at 5:13 pm #555916
    aadil1234
    Member
    • Topics: 75
    • Replies: 104
    • ☆☆

    Thank you sir 🙂

    December 15, 2019 at 10:52 am #555943
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Working capital’ is closed to new replies.

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