ASSIGNMENT
Course Code : MS-41
Course Title : Working Capital Management
Assignment No. : MS-41/TMA /SEM-I/2014
Coverage : All Blocks
Note : Attempt all the questions and submit this assignment on or before 30th April, 2014 to the coordinator of your study center.
-
a) Explain the concepts of Working Capital. Discuss the various factors that affect the requirement of Working Capital of a business entity.
b) Explain the distinguishing features of matching, conservative and aggressive strategies for financing working capital with the help of illustrations. Under which circumstances each of these are suitable?
- Why do firms hold cash and marketable securities? Discuss the critical variables of Cash flow forecasting and the different forecasting approaches of cash flow
- Explain the features of different forms of bank credit prevailing in India. Distinguish between pledge and hypothecation. Discuss the various methods of creating charge over the assets of the borrower in favour of the lender bank. Distinguish between Legal Mortgage and Equitable Mortgage.
- What is the significance of Inventory control? Discuss the different models of inventory management.
- From the following details you are required to make an assessment of the average amount of working capital requirement of Hindustan Ltd.
|
Particulars |
Average period of credit |
Estimate for the Ist year Rs. |
|
Purchase of Material |
6 weeks |
26,00,000 |
|
Wages |
1 ½ weeks |
19,50,000 |
|
Overheads: |
||
|
Rent, Rates, etc. |
6 months |
1,00,000 |
|
Salaries |
1 months |
8,00,000 |
|
Other overheads |
2 months |
7,50,000 |
|
Sales |
Cash |
2,00,000 |
|
Credit Sales |
2 months |
60,00,000 |
|
Average amount of stocks and works-in-progress |
4,00,000 |
|
|
Average amount of undrawn profit |
3,00,000 |
It is to be assumed that all expenses and income were made at even rate for the year.
USA 
India