Working capital cash flow
Cool Water Inc. sells bottled water. The firm keeps in inventory plastic bottles at 12% of the monthly projected sales. These plastic bottles cost $0.005 each. The monthly sales for the first four months of the coming year are as follows,
January: 2,200,000
February: 2,300,000
March: 2,800,000
April: 2,900,000
What is the monthly increase or decrease in cash flow for inventory given that an increase is a use of cash and a decrease is a source of cash? Hint: Write the decrease as a negative number.
What is the change in working capital for January?
What is the change in working captial for February?
What is the change in working captial for March?