Mathematics · Working Capital Gap Analysis
A small-scale manufacturing unit has a projected turnover of 800 lakh for the next financial year. The unit currently has a sanctioned working capital limit of 120 lakh. The unit's working capital cycle is 90 days. Calculate the gap in the working capital limit as per the Nayak Committee (Turnover Method) and determine if the unit is under-financed. Assume the unit provides a 5 percent margin.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Gap of 40 lakh; Unit is under-financed✓
- 2Gap of 20 lakh; Unit is over-financed
- 3Gap of 60 lakh; Unit is under-financed
- 4No gap; Unit is properly financed
Correct answer
Gap of 40 lakh; Unit is under-financed
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