CAF 1 FAR | Autumn 2026 | Q6 – Interpretation of Financial Statements | Sir Taha Popatia | IQSF

This video from IQ School of Finance features Sir Taha Popatia solving Question 6 from the Autumn 2026 CAF 1 FAR past paper regarding Interpretation of Financial Statements (0:00-0:30). The session provides a step-by-step walkthrough of calculating the Cash Operating Cycle and offers strategic advice for management. Part A: Calculating the Cash Operating Cycle (0:45-12:12) To determine the cash operating cycle, the instructor breaks down three core components: Inventory Days: Calculated as (Average Inventory / Cost of Goods Sold) × 365, resulting in approximately 76 days (3:15-6:16). Receivable Days: Calculated using average receivables and credit sales (85% of total sales), resulting in approximately 69 days (6:17-8:15). Payable Days: Calculated using average payables and credit purchases (derived from COGS), resulting in approximately 61 days (8:16-11:09). Result: The final Cash Operating Cycle is determined to be 84 days (11:10-12:05). Part B: Measures to Improve Cash Operating Cycle (12:13-19:28) The video suggests four measures management can take at the year-end to temporarily improve the cycle: Delay purchasing non-essential items to reduce year-end inventory levels (13:54-15:17). Offer promotions or discounts to encourage customers to pay before the year-end (15:18-16:42). Utilize the full credit period offered by suppliers instead of paying early (16:43-18:15). Offer discounts on slow-moving inventory to accelerate sales and clear stock (18:16-19:28). #StrategicCaseStudy #GroupTax #GroupTaxRevision #TaxRevision #Taxation #MusaddiqKeswani #CAStudents #ICAP #ICAPExamPreparation #IQSF #IQSchoolOfFinance