From the following information, calculate working capital cycle of Navin Motors. Also, work out number of operating cycles in a year for the company:Raw materials consumed during the year = ₹ 48,00,000Average stock of ra

Calculation of working capital cycle Raw material storage period (RM) = (Average stock of RM / Average cost of RM consumption) × 360 = (₹4,00,000 / ₹48,00,000) × 360 = 30 days WIP holding period (WIP) = (Average WIP / Average cost of Production) × 360 = (₹2,40,000 / ₹40,00,000) × 360 = 21.6 days, say 22 days Finished goods holding period (F) = (Average stock of finished goods / Average cost of goods sold) × 360 = (₹3,20,000 / ₹64,00,000) × 360 = 18 days Debtors' collection period (D) = 45 days (given) Credit period enjoyed (C) = 30 days (given) Hence working capital cycle (Net) = RM + WIP + F + D - C = 30 + 22 + 18 + 45 - 30 = 85 Days Number of Operating Cycles in a year = 360 / 85 days = 4.23 = 4 nos. (Approx.)