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Measures of annual turnover and throughput: Sales ZMK2.0million Cost of sales ZMK1.7million Material purchases ZMK1.3million Required: Calculate the working capital cycle (assume 365 days in a year, and assume that the value of

Measures of annual turnover and throughput: Sales ZMK2.0million Cost of sales ZMK1.7million Material purchases ZMK1.3million Required: Calculate the working capital cycle (assume 365 days in a year, and assume that the value of

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A manufacturing company has the following information relating to its working capital and rates of turnover: Components of working Capital Value ZMK Raw materials Work in Progress Finished goods stock 17,810 24,660 37,260 Full-screen Snip Period between despatch and invoice to customer 2 days Trade debtors Trade creditors 219,180 113,970 Measures of annual turnover and throughput: Sales Cost of sales Material purchases ZMK2.0million ZMK1.7million ZMK1.3million Required: Calculate the working capital cycle (assume 365 days in a year, and assume that the value of work in progress is equal to the cost of material plus 50% of the cost of converting materials into finished goods).
Transcribed Image Text:A manufacturing company has the following information relating to its working capital and rates of turnover: Components of working Capital Value ZMK Raw materials Work in Progress Finished goods stock 17,810 24,660 37,260 Full-screen Snip Period between despatch and invoice to customer 2 days Trade debtors Trade creditors 219,180 113,970 Measures of annual turnover and throughput: Sales Cost of sales Material purchases ZMK2.0million ZMK1.7million ZMK1.3million Required: Calculate the working capital cycle (assume 365 days in a year, and assume that the value of work in progress is equal to the cost of material plus 50% of the cost of converting materials into finished goods).
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