Marketable securities 5 accounts r total current

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Marketable securities 0 5 Inventory 26 25 Accounts receivable 25 30 Total current Liabilities 25 27 Total current assets 55 65 Long term debt 5 12 Fixed assets Net worth 65 76 Gross Fixed assets 56 70 less depr 16 20 Net Fixed assets 40 50 Total Liabilities 95 115 Total Assets 95 115 Rs. million Sources of Funds Issued long term Debt 7 Cash from Operations - Profits 12 - Depreciation 4 Total 23 Application of Funds Invested in Fixed assets 14 Paid dividend 1 Increase in WC 8 Total 23
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Need for Cash Budgeting Step 1 - Forecast the sources of cash. Step 2 - Forecast uses of cash. Step 3 - Calculate whether the firm is facing cash shortage or surplus. Step 4 Plan for working capital management
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Meeting working capital needs Alternatives: Borrowing Stretch payables
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Computation of WC requirements Operating cycle Cash conversion cycle Working capital requirements
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