Hello John,
Please help me with the following question
-Annual Credit Sales:$27m
-Cost of sales: $15m
-Trade receivables days:50 days
-Inventory days:60 days
-Trade Payable: 45 days
What is the net investment in working capital required?
1. In the answer, trade payables is calculated as $15m *45/360.
-Please explain, why $15m was used in the calculation.
Thanks
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Working Capital
6y ago#1What else could you assume on the information given?
We are forced to assume that the cost of sales is all purchases on credit.
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