From the following information presented by a manufacturing company, prepare a Working Capital Requirement forecast statement for the coming year:
a. Monthly sales (expected): 32,000 units of Rs. 10 each.
b. The anticipated ratios of cost to selling price:
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Raw materials
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40%
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Labour
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30%
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Overhead
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Rs. 16,000 per week
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c. Overhead expenses include a depreciation of Rs. 4,000 per week.
c. Planned stock includes raw materials for Rs. 96,000 and 16,000 units of finished goods.
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e. Materials stay in process
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2 weeks
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Credit to debtors
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5 weeks
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Credit from Creditors
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1 month
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Lag in payment of overhead
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2 week
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f. 25% of sales may be assumed against cash and cash in hand is expected to be Rs. 25,000. Assume that the production is carried on evenly throughout the year, and wages and overheads accrue similarly. A time period of 4 weeks is equivalent to a month.