Statement of changes in working capital

What is the statement of changes in working capital? Statement of changes in working capital is prepared by recording the changes in current assets and current liabilities during the accounting period. The working capital during the accounting period is bound to change due to increase or decrease in the current assets and current liabilities. Purpose …

Read moreStatement of changes in working capital

Estimating working capital requirements

1. Estimating working capital requirement using operating cycle method: Problem: X Ltd Co. wants to know working capital by operating cycle methods when : Estimated Sales 20,000 units @ $5 P.U. Production and Sales will remain similar throughout the year. Production costs: M – 2.5 P.U., Labour 1.00 P.U. Overheads $17.500. Customers are given 60 …

Read moreEstimating working capital requirements