IGNOU MS 41 SOLVED ASSIGNMENT

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MS 41 (January 2025 - July 2025) - ENGLISH

ASSIGNMENT

Course Code :MS-41

Course Title:Working Capital Management

Assignment Code :MS-41/TMA/JAN/2025

Coverage :All Blocks

Note: Attempt all the questions and submit this assignment to the coordinator of your study centre. Last date of submission for January 2025 session is 30th April, 2025 and for July 2025 session is 31st October, 2025.

1. Select any two firms from the same industry and collect their Financial Statements for the years 2022-2023 & 2023-2024, and calculate their Efficiency, Liquidity and Structural Ratios. Based on these ratios give your views on the working capital management of these firms.

2. The company XYZ Ltd has annual sales of Rs. 50 lakhs and is currently extending 30 days' credit to the dealers. It is considering change in credit policy and the following information is available:

The average collection period now is 30 days.

Costs:

Variable Cost: 80 percent on sales

Fixed Cost: Rs. 6 lakhs per annum

Required (pre-tax) return on investment: 20 percent

Credit Policy	Average Collection Period	Annual Sales Rs.
P	45 days	56,00,000
Q	60 days	60,00,000
R	75 days	62,00,000
S	90 days	63,00,000

You are required to recommend as to which of the policies given above should be adopted by XYZ Ltd. What are the assumptions you have made for coming to such decision?

3. Visit any Bank of your choice and study the methods of Appraisal that the Bank follows while extending Credit Facility to the Business Houses. Write a detail note on your findings.

4. 'Working Capital Module simulates the integration of working capital components into the Capital Investment (CI) process'. Give the objectives and explanation of the operation of each module that forms a part of the working capital capital investment process. Also highlight the sequential operation of the WC module.

MS 41 (January 2025 - July 2025) - ENGLISH

ASSIGNMENT

Course Code:MS-41

Course Title:Working Capital Management

Assignment Code:MS-41/TMA/JAN/2025

Coverage:All Blocks

Note: Attempt all the questions and submit this assignment to the coordinator of your study centre. Last date of submission for January 2025 session is 30th April, 2025 and for July 2025 session is 31 October, 2025.

1. Select any two firms from the same industry and collect their Financial Statements for the years 2022-2023 & 2023-2024, and calculate their Efficiency, Liquidity and Structural Ratios. Based on these ratios give your views on the working capital management of these firms.

2. The company XYZ. Ltd has annual sales of Rs. 50 lakhs and is currently extending 30 days' credit to the dealers. It is considering change in credit policy and the following information is available:

The average collection period now is 30 days.

Costs:Variable Cost: 80 percent on sales

            Fixed Cost: Rs. 6 lakhs per annum

Required (pre-tax) return on investment: 20 percent

Credit Policy	Average Collection Period	Annual Sales Rs.
P	45 days	56,00,000
Q	60 day	60,00,000
R	75 days	62,00,000
S	90 days	63,00,000

You are required to recommend as to which of the policies given above should be adopted by XYZ Ltd. What are the assumptions you have made for coming to such decision?

3. Visit any Bank of your choice and study the methods of Appraisal that the Bank follows while extending Credit Facility to the Business Houses. Write a detail note on your findings.

4. 'Working Capital Module simulates the integration of working capital components into the Capital Investment (CI) process". Give the objectives and explanation of the operation of each module that forms a part of the working capital-capital investment process. Also highlight the sequential operation of the WC module.

MS 41 (January 2026 - July 2026) - ENGLISH

ASSIGNMENT

Course Code : MS-41

Course Title : Working Capital Management

Assignment Code : MS-41/TMA/JAN/2026

Coverage : All Blocks

Note: Attempt all the questions and submit this assignment to the coordinator of your study centre. Last date of submission for January 2026 session is 30th April, 2026 and for July 2026 session is 31st October, 2026.

1. As a Finance Manager describe the various factors that you would take into consideration before assessing the working capital requirements of your firm.

2. You are required to prepare a Cash Budget of XYZ Ltd. for the months of May, June and July 2026 from the information given below:

(a) Income and Expenditure Forecasts:

Months	Credit Sales	Credit Purchases	Wages	Manufacturing Expenses	Office Expenses	Selling Expenses
March	60,000	36,000	9,000	4,000	2,000	4,000
April	62,000	38,000	8,000	3,000	1,500	5,000
May	65,000	33,000	10,000	4,500	2,500	4,500
June	58,000	35,000	8,500	3,500	2,000	3,500
July	56,000	39,000	9,500	4,000	1,000	4,500
August	60,000	34,000	8,000	3,000	1,500	4,500

b) Cash balance on 1st May 2026 is Rs. 8,000.

c) Plant costing Rs. 16,000 is due for delivery in July, payable 10% on delivery and the balance after 3 months.

d) Advance Tax of Rs. 8,000 each is payable in March and June.

e) Period of credit allowed (i) by suppliers is two months and (ii) to customers is one month.

f) Lag in payment of manufacturing expenses is half month.

g) Lag in payment of office and selling expenses is one month.

3. Why has Reserve Bank of India (RBI) made it compulsory for the banks to introduce loan component in the credit granted to big borrowers.

4. "Liquidity and Profitability are significant factors which are taken into consideration while taking working capital decisions." Discuss. Explain the relation between liquidity, profitability and working capital.

5. Alpha Ltd. is examining the question of relaxing its credit policy. It sells at present 20,000 units at a price of Rs. 100 per unit. The variable cost per unit is Rs. 88 and average cost per unit at the current sales volume is Rs. 92. All the sales are on credit, the average collection period being 36 days.

A relaxed credit policy is expected to increase sales by 10% and the average age of receivables to 60 days. Assuming 15% return, should the firm relax its credit policy?

 

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