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प्रश्न
Explain the following as factors affecting the requirement of working capital:
The credit allowed and availed
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उत्तर
The credit allowed and availed: Credit means allowing the sale of goods without immediate cash payment, and hence, the number of debtors increases and in turn the requirement of working capital will increase. A strict credit policy will reduce the requirement of working capital.
Credit allowed
Liberal credit policy ⇒ High working capital
Strict credit policy ⇒ Low working capital
Credit availed
Difficult to avail credit from suppliers ⇒ High working capital
Easy to avail credit from suppliers ⇒ Low working capital
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संबंधित प्रश्न
Match the pairs
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Group A |
Group B |
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a. Fixed Capital |
1. Owned Capital |
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b, Overdraft facility |
2. Bearer document |
|
c. Share certificate |
3. Investment in fixed assets |
|
d. Debentures |
4. Current Account |
|
e. Return on shares |
5. Application Money |
|
|
6. Dividend |
|
7. Investment in current assets |
|
|
8. Borrowed capital |
|
|
9. Savings Account |
|
|
10. Registered Document |
Explain the following as factors affecting the requirements of fixed capital:
Technology upgradation
Explain the following as factors affecting the requirements of working capital:
Scale of operations
Explain the following as factors affecting the requirements of working capital:
Seasonal factors
What is working capital? Discuss five important determinants of working capital requirement?
Write a word or a term or a phrase which can substitute the following statement :
The difference between current assets and current liabilities.
Answer the question.
Briefly explain any four types of working capital required by a business concern.
Why is working capital also known as circulating capital?
Higher working capital usually results in :
A fixed asset should be financed through
What are the important determinants of working capital requirement?
______ of a firm refers to those assets which can be converted into cash or cash equivalents in a short period of time.
Working capital is calculated as?
Net working capital may be defined as the:
Assertion (A): A commercial bill is a bill of exchange used to finance the working capital requirements of business firms.
Reason (R): Commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.
Read the following text and answer the following question on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
"Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%)." The proportion of debt in the overall capital is called ______.
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
