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working capital is estimated, in such case.

WORKSHEET 1: ESTIMATING WORKING

CAPITAL
LEVEL OF ACTIVITY IN UNITSI
Which item is to be estimated
How the required amount is to be estimated Result
Amount Locked Up Duration of Cycle
Units per Rate per Unit months]
Month
A (B] IC] [AxBxC]
. CURRENT ASSETS
1. Stocks
1.1 Raw-Material [RM] units months in stock
purchase cost
1.2 Work-in-Progresss
a. materials units RM rate months in process XXX
b. labour units months in process x 1/2 XXX
C. overheads units
wage rate
overhead rate months in process x 1/2
1.3 Finished Goods [FG units production cost months in stock XX
2. Debtors units sale price months of credit to debtors XX
 M-II)
3. Pre-pald Expenses months of pre-payment
4. Cash and Bank Balence
units expense rate Xx
amount given XXX
Total Curront Assets
. CURRENT LIABILITIES [1+2+3+4] XXX
1. Creditors units purchase cost months of credit by
creditors
XXX
2. Outstanding Expenses units expense rate months outstanding
3. XXX
Advance From Customers amount given XXX
Totel Current Llablitles
[1+2+3]| XX
Worklng Capital=1- u XX
Add Margin of Safety (given) XX
WORKING CAPITAL REQUIRED XX

Notes:
(1) Level of activity is in tems of units (e.g. in case of a manufacturing concern). Normally, this is a
single figure (e.g. 50,000 units will be produced during the period).
(2) The period shown above is in tems of months. If it is in terms of days, weeks or year, the
workings for all items and the results will also be shown in terms of days, weeks or year
(3) Production Cost Per Unit (in 1.3 above) is equal to Total of RM rate (1.2.a) + Wage rate (1.2.b)
+Overhead rate (1.2.c.)