The following information was extracted from the books of XYZ ltd for the financial year 2017 and

Fantastic news! We've Found the answer you've been seeking!

Question:

The following information was extracted from the books of XYZ ltd for the financial year 2017 and 2018 respectively

2017 2018

Stock of raw materials 30,000 40,000

Work in progress 10,000 18,000

Finished goods stock 130,000 170,000

Debtors 230,000 2,300,000

Annual sales 1,000,500 1,050,000

Cost of production 110,000 100,000

Trade creditors 300,000 400,000

Annual purchase of raw materials 700,000 770,000

Required:
i. Compute the working capital cycle (10 marks)
ii. Suggest the ways in which the cycle can be reduced (4 marks)
b) Explain three dangers of building excessive working capital (6 marks)

Related Book For answer-question

Advanced Accounting

ISBN: 978-0077862220

12th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

See More Books

Posted Date: Feb 13, 2023 05:19 AM

See More Questions

The following information was extracted from the books of Pesamali bank for the year ended 31 st December 2020. Sh. "000" Loss on disposal of shares 94,000 Income from trading activities 480,000...
The following information was extracted from quarterly reports for Wal-Mart Stores, Inc. (amounts in millions): The following information was extracted from the notes to the financial statements in...
The following information was extracted from the December 31, 2017, balance sheets of four different companies: There were no transactions in equity securities during 2018, and as of December 31,...
Consider the circuit shown in (Figure 1). Suppose that v 240 V,v 2 110 V, and v 3 450 V Figure 1 of 1 a) Use the mesh-current method to find the magnitude of the total power developed in the circuit...
Diamond Distribution Company began business on January 2, 2005. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were...
For a certain interval of motion the pin A is forced to move in the fixed parabolic slot by the horizontal slotted arm which is elevated in the y-direction at the constant rate of 3 in. /sec. All...
Table 3.4 on page 208 shows the number of points scored and penalty minutes for 24 ice hockey players on the Ottawa Senators NHL team for the 2014-2015 season. The data are also stored in...
During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders' equity. The articles of incorporation authorized the issue of 8...
A monopolist has the long run cost function C(Q) = 502. Inverse market demand is PD (Q) = 360-2Q. The firm practices first degree (perfect) price discrimination. a. Find the monopolist's profit...
At the beginning of the year, Carla Vista Company had total assets of $763,000 and total liabilities of $296,000. Answer the following questions. (a) If total assets increased $134,000 during the...
Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other...
The name under which a fi rm does its business. a. goodwill b. trade na me c. trade s ecret d. brand na me e. trademark
In general, how much do unsecured creditors receive from a liquidation? How much do stockholders receive?
How does the income statement differ from the balance sheet with regard to the time period reported?
In general, can the risk of a portfolio be reduced to zero by increasing the number of stocks in the portfolio? Explain.
A word, name, symbol, device, or combination thereof adopted and used by a manufacturer or merchant to identify his or her goods and distinguish them from goods manufactured or sold by others. a....
A mutual fund has a front end load of 4.7% and an annual management fee of 1.2%. If you invest $100k into the fund today, and one year from now the underlying fund assets increase in value by 13.2%....
Find the area of the surface generated by revolving the para- metric curve x = cos 1, y = sin? 1 (0 < I sa/2) about the y-axis.
During 2014, an estate generated income of $20,000: Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,000 Interest income . . . . . . . . . . . . . . . . . . . . . ....
The City of Bagran-off holds $90,000 in cash that will be used to make a bond payment when it comes due early next year. The assistant treasurer had made that decision. However, just before the end...
Access The Coca-Cola Company's 2012 financial statements (www.thecoca-colacompany.com) Identify and discuss the following aspects of consolidated tax expense disclosed in the financial statements: 1....
Companies are facing a great amount of change in every facet of their operations today. To remain competitive, companies must keep abreast of current developments in several areas. You recently got...
For each of the situations listed, identify the primary standard from the IMA Statement of Ethical Professional Practice that is violated (competence, confidentiality, integrity, or credibility.)...
Complete the following statements with one of the terms listed here. You may use a term more than once, and some terms may not be used at all. a. To quickly navigate to the end of the data in a...

The following information was extracted from the books of XYZ ltd for the financial year 2017 and

Question:

Expert Answer:

The detailed answer for the above question is provided below i Working capital cycle The working capital cycle is the length of time it takes for a company to convert its resources invested in current ... View the full answer

Advanced Accounting

Students also viewed these accounting questions