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152 Corporate Finance BRILLIANT’S

Average Daily Cost of Finished Goods Sold
~oMo J¶o {’${ZíS> JwS²>g H$s X¡{ZH$ EdaoO H$m°ñQ> 1,800
Average Daily Consumption of Raw Materials
am° ‘Q>o[a¶ëg EdaoO X¡{ZH$ H$ÝOåßeZ 1,800
Average Period of Credit available from the suppliers is 120 days
gßbm¶g© go CnbãY H«o${S>Q> H$s EdaoO Ad{Y 120 {XZ h¡

Based on the above data, state: / CnamoŠV S>mQ>m Ho$ AmYma na ~VmB`o…
(a) Average Period of Raw Materials holding in Stores;
ñQ>mog© _| aIo J`o am° _Q>o[a`ëg H$s Am¡gV Ad{Y&
(b) Credit Period available to the customers; / J«mhH$m| Ho$ {bE CnbãY H«o${S>Q> Ad{Y&
(c) Average Period for which Finished Goods Stay in Godowns;
Am¡gV Ad{Y {OgHo$ {bE {\${ZíS> JwS²>g JmoXm_ _| ahVr h¡&
(d) Average Period for Conversion of Raw Materials into Finished Goods;
am° _Q>o[a`b H$mo {\${ZíS> JwS²>g _| n[ad{V©V H$aZo Ho$ {bE Am¡gV Ad{Y&

(e) Working Capital Cycle (in days) and the Working Capital Requirement in (monetary
terms). / d{Hª$J H¡${nQ>b gm`H$b ({XZm| _|) VWm d{Hª$J H¡${nQ>b Amdí`H$Vm (_moZoQ>ar ê$n _|)&

Solution:
(a) Average Period of Raw Materials holding in stores
Average Stock of Raw Material 1,80,000
= = = 100 days
Average Daily Consumption 1,800
(b) Credit period available to customers

Average Balance of Debtors 1,50,000
= = = 75 days
Average Daily Sales 2,000
(c) Average period of finished goods holding

Average Stock of Finished Goods 54,000
  30 days
Average Daily Cost of Finished Goods Sold 1,800
(d) Average period for converting raw materials into Finished Goods

Average Stock of Work in Progress 1,00,000
   56 days
Average Daily Cost of Finished Goods 1,800
(e) Working Capital Cycle
= 100 + 75 + 30 + 56
– 120 (average credit available from suppliers) = 141 days