The situation
A fictional Indore distributor reports revenue up from ₹80 lakh to ₹100 lakh and profit up from ₹8 lakh to ₹12 lakh. Last year CFO was ₹10 lakh. This year depreciation is ₹2 lakh, receivables increase ₹11 lakh, inventory increases ₹5 lakh and payables increase ₹3 lakh. Assume no other reconciling items. Of the additional receivables, ₹8 lakh is over 60 days past due.
1. Work out the numbers
Which working-capital movement released cash?
2. Make the decision
Which diagnosis is best supported?
Complete the calculation above to unlock this decision.