1/The Belgian Vandeputte Group has the following operating structure:
sales = 100, raw materials used in the business = 30, direct production costs = 40, administrative costs = 20. Operating cycle: raw materials inventories = 15 days, length of production cycle = one month, inventories of finished products = 15 days. Payment terms: suppliers two months, customers one month, other costs paid in cash. Assuming zero VAT, calculate working capital in days of sales. The production cycle lasts one month, which means that in-progress inventories represent one month of raw materials and 15 days of production costs.
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