Working capital cycle for a trade, Financial Econometrics

Assignment Help:

Working capital cycle for a trade

Inventories days (time inventories are

held before being sold)

 

+

 

Trade receivables days (how long the

credit customers take to pay)

 

-

 

 

Trade payables days (how long the

company takes to pay its suppliers)

 

=

 

 

Working capital cycle (in days)

(Inventories/ cost of sales)x 365 days

 

 

+

 

(Trade receivables / credit sales) x 365 days

 

 

-

 

 

(Trade payables / purchases)x 365 days

 

 

=

 

 

Working capital cycle (in days)

Please note that for "trade payable days" calculation, if information about credit purchases isn't known then cost of sales is used instead.


Related Discussions:- Working capital cycle for a trade

Chapter , a debit is used to record

a debit is used to record

Options, Four European vanilla Call options ()iC· on an underlier with no i...

Four European vanilla Call options ()iC· on an underlier with no interim cash flows, have identical maturity T. Their strike prices iK are such that 1234KKKK A trader buys ()1CK an

Microeconomics, appraise the Baumol''s sales revenue maximization theory as...

appraise the Baumol''s sales revenue maximization theory as an alternative objective of the firm o

Explain the working capital management, Q. Explain the Working capital mana...

Q. Explain the Working capital management? Working capital management Working capital management is administration of current liabilities and currentassets.Effective ma

Analyse keyness model of liquidity preference, Problem : PART A (a) ...

Problem : PART A (a) Analyse Keynes's model of liquidity preference. (b) Analyse the instruments central banks use to control the supply of money in the economy. PA

What do you meant by overtrading, Q. What do you meant by Overtrading? ...

Q. What do you meant by Overtrading? When a company is trading large volumes of sales very quickly, it may also be generating large amounts of credit sales and consequently lar

#titleAssignment Help.., Question I: (50 points) Derive the pricing formula...

Question I: (50 points) Derive the pricing formula for the expected excess return of a risky stock and the riskfree stock in the traditional consumption-CAPM assuming that the leve

What is over-capitalisation, Q. What is Over-capitalisation? Over-capi...

Q. What is Over-capitalisation? Over-capitalisation This is the opposite of over trading. It means a company has a large volume of inventories, cash balances and trade re

Distinguish and differentiate between a fixed effect model, Question: (...

Question: (a) What do you understand by these processes? Autoregressive Distributed lag Moving Average (b) Write down an AR(2) process and a MA(1) process. (c) Calc

Explain the theoretical impact on the risk discount rate, Question : A ...

Question : A proprietary life company issues only non-profit guaranteed growth bonds. The company invests only in equities with an expected return of 10% p.a, the risk free rat

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd