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  • Working Capital Example Notes

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    keerthana
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    The document compares the company's current working capital policy to a proposed new policy across key metrics like sales, profits, discounts, bad debts, days of sales outstanding, investment in receivables, interest, and net impact. While the proposed policy results in savings in interest and bad debts, it also leads to a fall in profits and an overall net loss. Therefore, the document recommends continuing with the current working capital policy instead of adopting the proposed one.

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    WORKING CAPITAL EXAMPLE NOTES.xlsx

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    The document compares the company's current working capital policy to a proposed new policy across key metrics like sales, profits, discounts, bad debts, days of sales outstanding, investment in receivables, interest, and net impact. While the proposed policy results in savings in interest and bad debts, it also leads to a fall in profits and an overall net loss. Therefore, the document recommends continuing with the current working capital policy instead of adopting the proposed one.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    11 views2 pages

    Working Capital Example Notes

    Uploaded by

    keerthana
    The document compares the company's current working capital policy to a proposed new policy across key metrics like sales, profits, discounts, bad debts, days of sales outstanding, investment in receivables, interest, and net impact. While the proposed policy results in savings in interest and bad debts, it also leads to a fall in profits and an overall net loss. Therefore, the document recommends continuing with the current working capital policy instead of adopting the proposed one.

    Copyright:

    © All Rights Reserved
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    of 2

    WORKING CAPITAL

    EXAMPLE
    AMOUNT PRESENT POLICY PROPOSED POLICY

    sales 35000 33000


    portion availing dis 0 11000
    profit@9% 3150 2970
    amt of dis 0 220
    bad debts 700 495
    Dso 36 23.3333333333333
    invst in rec 3452.05479452055 2109.58904109589
    int 379.72602739726 232.054794520548

    savings in int 147.671232876712


    savings in bad debts 205
    profits -180
    fall in dis i.e..amt of dis -220

    NET -47.3287671232877

    ACCORDING TO THE NEW PROPOSAL WE ARE GETTING LOSS SO WE SHOULD NOT GO THROUGH IT WE SHOULD CO
    EVEN THOUGH THE NEW PROPOSED PLAN IS GOOD IN SAVINGS IN INT AND BAND DEBTS BUT IF WE CONTINUE THA
    T GO THROUGH IT WE SHOULD CONTINUE THE CURRENT PROPOSAL
    D DEBTS BUT IF WE CONTINUE THAT OUR EXISTING PROFITS IS FALLING DOWN

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