Practical Approach to Working Capital & Contract Financing

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1. Which of the following is the right definition of Working Capital?

Table A (Questions : for no 2, 3 & 4)


NWC 2025 (P) 2024 (A)  
Stocks RM 180,000 RM 150,000  
Debtor RM 120,000 RM 100,000  
Creditor RM 60,000 RM 50,000  
       

P = Projection
A = Audited

2. With reference to table A, compute the amount Gross Working Capital in 2024

3. Compute the projected Net Working Capital in 2025

4. Compute the amount of Working Capital to be financed by MARA

5. Which formula commonly used by MARA to assess repayment capacity by borrowers?

6. For Short Term Funding requirement, the facility granted are normally self liquidated. To ensure good payment capacity . . .

I. The business must be able to generate decent profit
II. The operating cycle must be good quantity
III. The tenor must be appropriate
IV. Debt Service Ratio (DSR) must be 125% and above

Table B (Questions : for no 7 & 8)

Items/Time (mth.) 1 2 3 4 5
Cash Inflow:  
• Collection 100 120 150 200 180
Total CIF  
Cash Outflow:  
• Payments 100 130 130 140 130
• Gen. Exp. 20 20 20 20 20

7. Table B is called

8. Based on Table B how much financing to be recommended

9. Based on Table B, grace period to be recommended is

10. Cost Overrun Risk of the contract or project can be mitigated by the following except