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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
Explain the following as factor affecting the requirements of fixed capital:
Choice of technique
Explain the following as factors affecting the requirements of fixed capital:
Financing alternatives
Explain the following as factors affecting the requirements of working capital:
Nature of business
Varunica Ltd., a reputed truck manufacturing company, needs rupees twenty crores as additional capital to expand its business. Mr. Alind Jindal, the CEO of the company, wants to raise funds through equity. The Finance Manager, Mr. Nikhil Sachdeva, suggests that the existing shareholders be offered the privilege to subscribe to new issue of shares as per the terms and conditions of the company which was agreed by Mr. Alind Jindal.
Name the method through which the company decided to raise additional capital.
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer.
How does working capital affect both the liquidity as well as profitability of a business?
Companies with a higher growth potential are likely to
Current assets are those assets which get converted into cash
A fixed asset should be financed through
What are the important determinants of working capital requirement?
Working capital is calculated as?
______ involve identifying various sources of funds and deciding the best combination for raising the funds.
Net working capital may be defined as the:
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
What is fixed capital?
Through which sources must fixed capital be financed?
Why do capital budgeting decisions matter for long-term growth?
What does the risk of capital budgeting decisions affect?
How does leasing affect fixed capital requirement?
