3. Working capital cycle Suppliers Raw materials WIP Finished goods overheads cash Accounts receivables

5. Proportion of current assets and fixed assets Trading/construction 10-20 80-90 Edible oils/tobacco 20-30 70-80 Cotton textile/sugar 30-40 60-70 Tea plantation 40-50 50-60 Steel/chemicals 50-60 40-50 Aluminium/shipping 60-70 30-40 Electricity generation 70-80 20-30 Hotels/Restaurants 80-90 10-20 Industries Fixed assets (%) Current assets (%)

8. Strategies for financing time Capital requirement Peak requirement Minimum requirement median

12. Tandon Committee (example) 400 Core Current assets A1 2.22 1.33 1.25 Current Ratio H 450 750 800 Current liabilities ( including bank finance) G 1000 1000 1000 Current Assets F 550 A1+(25%(A-A1)) 250 (25% of A) 200 (25% of gap) Net working Capital / Margin Money (long term) E 250 (gap-margin) 550 (gap-25%of A) 600 (75% of Gap) Bank Finance D 800 800 800 Working Capital Gap C 200 200 200 Creditors & payables B 600 1000 1000 Current Assets A 3 rd Method 2 nd Method 1 st Method

28. Should credit be granted? Credit Risk analysis character capacity capacity weak strong capital capital weak strong Dangerous risk Doubtful risk weak strong weak Fair risk strong Excellent risk capital capital weak strong strong weak weak strong Credit Period?

36. Cash management cycle cash collections disbursements Short term investments Control by reporting Funds flow Information flow With timely information reporting it is possible to generate significant Income by properly managing collections, disbursements & investments.

37. Collection float Customer Mails check Receipt of check Check deposit Actual credit Mail float Processing float Clearing float Total float

52. Models-applications Regular Simplified regular Simplified regular Simplified liberal CRA Model 520 470 230 230 Total 120 70 20 50 NFBWC 400 400 210 180 FBWC IV III II I situations ( Rs lakhs)