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Company A has the following revenues and costs:
Revenues Raw Material Cost
December 500.000 300.000
November 600.000 400.000
October400.000 250.000


If ,at the end of the year, account payables for raw materials amounted to 900.000 Euro and account receivables reached 1.200.000 Euros, calculate the average number ofdays sales outstanding the the average days of payment to suppliers. Assuming production costs are 25% of raw materials, calculate the value of inventory, if average days on hands at the end of theyear were 45 days and the sales forecast for the first quarter of next year was 0.3 Million Euro per month and row material cost 50% of sales .


1. A company has the following balance sheet:[pic]

Assuming revenues and costs flat year on year, how working capital has been managed? The change in working capital, has it represented cash outflow or inflow for the company? L

IfEarnings Before Interests and Taxes in 2006 were 1.2 M Euro, Taxes 0.3 M and Net Income 0.5 M, calculate ROA and ROE.

2. A company with negative working capital increased revenue and costs 10%year-on-year leaving DSO, DOH and average days of payment to supplier unchanged.
What is the impact in working capital? The company has generated or has absorbed cash in the year?


3. In order tofinance internally growth, Powerfood, projected the following P&L and established balance sheet objectives as follows:

[pic]






Balance Sheet objectives:


- AccountsReceivable. Reduction from 75 days in 2010 to 60 days at the end of 2011.
- Inventory. Decrease to 30 days in 2011 from 45 days in 2010
- Payment to suppliers in an average of 70 days in 2010 versus 60days in 2009. External suppliers include 60% of the cost of product and 20% of expenses. No growth expected for 2012.


Assuming operations are practically linear (it sells and allocate...