You are a financial expert and your company starts a business of manufacturing baby toys. Suggest the working capital requirement and phases of operating cycle.
It is a manufacturing company thus, the requirement of working capital is large as these companies require to maintain stock of raw materials, semi-finished and finished goods. Phases of operating cycle of a manufacturing company are:
(i) Procurement of raw material.
(ii) Payment of labour, power, fuel and other expenses.
(iii) Converting raw material into finished goods.
(iv) Sale of finished goods.