• Debtors :-

Working Capital tied up in debtors must be estimated on the basis of cost of sales (excluding depreciation):
[Cost of goods produces (that is raw materials + wages manufacturing, administrative & selling overhead)] * [Average debt collection period (weeks / months)]/[(52 weeks/ 12 months)]= ---------

• Cash and Bank Balance :-

(That is minimum cash balance required to be maintained = ----
----
Total Current Assets (A) _______

Less: Current Liabilities ----

• Trade Creditors :-

[Credit period allowed by creditors Of raw material] *[ Cost of yearly consumption (weeks/ months) / (52 weeks/ 12 months)] m= --------

• Wages :-

Yearly wages * [Average time lag in payment of wages (weeks/ months)/ (52 weeks/ 12 months)]

• Overheads:-

Yearly Overheads (other Than Depreciation) * [Average time lag in payment of overheads (weeks/ months) / (52 weeks/ 12 months)] =

Total Current Liabilities (B) --------------

Working Capital (A) - (B) --------------

Add: Provision for Contingencies --------------

Estimated Working Capital Requirement --------------