Question

Working Capital Financing - Company A reported the following financial information in a recent financial statement ($ milllions):

Sales	$50,272
Cost of sales	37,611
Inventory	5,897
Accounts receivable	2,348
Accounts payable	4,894

(a) Compute the additional working capital financing period for Company A? (include formulas used to answer problem)

Working Capital Financing - Company B reported the following financial information in a recent financial statement ($ millions):

Sales	$87,048
Cost of sales	77,739
Inventory	6,638
Accounts receivable	965
Accounts payable	6,544

(b) Compute the additional working capital financing period for Company B? (include formulas used to solve problem)

Answer 1

Working Capital = Current Assets -Current Labilities
Requirement a
Project A
	($ millions)
Inventory	5,897
Accounts Receivable	2,348
Total Current Assets	8,245
Accounts Receivable	2,348
Total Current Liabilities	2,348
Additional Working Capital	5,897
Requirement b
Project B
	($ millions)
Inventory	6,638
Accounts Receivable	965
Total Current Assets	7,603
Accounts Receivable	6,544
Total Current Liabilities	6,544
Additional Working Capital	1,059