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MS-41 Solved Assignment

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  • Version: 2018 Jan - June

Soft Copy: Yes
Downloadable File: Yes
University: IGNOU
Course: Master of Business Administration

Q&A of Mba MS-41 Solved Assignment 2018 - Working Capital Management

Q. The annual figures of Alpha Ltd are as follows:
(i) Sales at home, at 1 month credit Rs. 12,00,000.
(ii) Export at 3 months credit, S.P. 10% below the home price Rs. 5,40,000.
(iii) Materials used, suppliers extend 2 months credit Rs. 4,50,000.
(iv) Wages paid, half month in arreas Rs. 3,60,000.
(v) Manufacturing expenses, paid one month in arreas Rs. 5,40,000.
(vi) Depreciation on fixed assets Rs. 60,000.
(vii) Administrative expenses, paid one month in arrear Rs. 1,20,000.
(viii) Sales promotion expenses, payable quarterly in advance Rs. 60,000.
Alpha Ltd. sells goods in the domestic market on a gross profit of 25%. It keeps one month stock of raw materials as well as finished product and believes in keeping Rs. 1,00,000 available to it. You are required to calculate the working capital requirement of the company, assuming 15% safety margin.


Q. Give a complete overview of the different marketable securities that are available for investments.

Answer. .........

Q. Select any financial Institution/ Organisation of your choice and obtain information about the important components of its credit policy and the attributes that they take into consideration while deciding the credit wortheness about its customers.

Q. Describe the creation of Euro Money and Eurocurrency Markets? Discuss the factors contributing to the growth of the Euromarkets.


Q. 'The Working Captal Module is divided into three additional parts beyond the investment information presented in the Capital Investment (CI) module'. Discuss of objectives and operation sequential operation of the working capital module. Discuss the objectives and operation of each these three parts.

Answer. ......

Product Details: MS-41 Solved Assignment 2018 - Working Capital Management

Course: Ignou MBA (Master of Business Administration)
Session: Jan - June 2018

Old Sample Answers of Mba Ignou MS-41 Assignments

Q. What is Working Capital?
Answer. Working capital is a measure of a company's current assets less its current liabilities........... The management of working capital is a crucial element of cash flow management......
Managing working capital is essential for success, as the ability to avoid a cash crisis and pay debts as they fall due depends on managing
Receivables, through effective credit approval, invoicing, and collection activity
Inventory, through effective ordering, storage, and identification of inventory Payables, by negotiation of trade terms and through taking advantage of prompt-payment discounts
Cash, by effective forecasting, short-term borrowing, and/or investment of surplus cash where possible
The working capital cycle works (at least in theory) as follows: a firm will purchase inventory (either as finished goods or as raw materials) on credit from its suppliers (appearing as creditors in the working capital)...... After production has taken place the finished goods will be sold on to customers as either cash or credit sales (now appearing as trade receivables in the working capital)........... The firm will eventually receive the cash from these credit customers, which in turn can then be used to settle the amounts owing to the credit suppliers as well as any other obligations it has run up during this period, such as wages and other expenses.......... Get Ignou Mba MS-41 Solved Assignment 2018 Jan - June Working Capital Management..........
A firm will wish to minimize the length of its working capital cycle. The longer a firm holds inventories and the longer a firm takes to collect cash from its customers in respect of credit sales, the more likely a firm will face liquidity problems........ Therefore a firm will want to minimize the time cash is tied up in working capital, so as to avoid potential difficulties with cash flow.
The working capital cycle (also known as the firmís operating cycle) can also be measured in terms of the time taken for money to pass through each stage of the working capital. The operating cycle for its working capital will consist of the following timings for cash being tied up in the various stages of the working capital cycle.........
The objective of working capital management by all the firms is to provide enough liquidity so that production process continues smoothly during the normal course of the business.......... Further, the focus is to maintain an optimum level of current assets so that funds of the firm do not remain unnecessarily idle.......... The finance manager aims at efficiently managing the current assets and liabilities to meet the firmís working capital requirement. Inefficient working capital management may lead to higher cost of funds and may increase the risk profile of the firm.

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