Chirping Birding Limited approached their bankers for working capital requirement. The bank has agreed to sanction the same by retaining margins as under: Raw materials: 18% Work-in-progress: 30% Finished goods: 20% Debt

Chirping Birding Limited approached their bankers for working capital requirement. The bank has agreed to sanction the same by retaining margins as under: Raw materials: 18% Work-in-progress: 30% Finished goods: 20% Debtors: 10% The bank has also acceded to the request of the company to add 10% to the estimated figure of working capital to cover the contingencies. Following projections are being made available to bank by the company: Estimates Particulars Amount (in ₹) Annual sales 18,00,000 Cost of production 14,40,000 Raw materials purchased 9,35,000 Monthly expenditure 50,000 Anticipated opening stock of raw materials 1,80,000 Anticipated closing stock of raw materials 1,55,000 Inventory Norms Particulars Duration Raw material 2 months Work-in-progress 15 days Finished goods 1 month The company enjoys a credit of 15 days on its purchases and allows one month credit on the goods sold. Company has received advance of ₹2,50,000 against the sales orders. Given the above and stating assumptions, if any so taken : Describe the factors determining the margin.