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Explain the Following as Factors Affecting the Requirements of Working Capital: Production Cycle - Business Studies

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प्रश्न

Explain the following as factors affecting the requirements of working capital:

Production cycle

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उत्तर

Production cycle: A longer production cycle will require high working capital as it will take more time to convert raw material into finished products. On the other hand, a small production cycle will require less working capital.

Long production cycle ⇒ High working capital

Small production cycle ⇒ Low working capital

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2013-2014 (March) All India Set 1

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संबंधित प्रश्न

Explain briefly any four factors that affect the working capital requirement of a company.


Explain the following as factor affecting the requirements of fixed capital:

Scale of operations


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


Explain the following as factors affecting the requirements of working capital:
Seasonal factors


Explain the following as factors affecting the requirement of working capital:

The credit allowed and availed


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. 


Fixed Capital Working Capital 


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 :


Current assets are those assets which get converted into cash


Higher dividend per share is associated with


What are the important determinants of working capital requirement?


______ refers to the decisions regarding where to invest so as to earn the  highest possible returns on investment.


______ involve identifying various sources of funds and deciding the best combination for raising the funds. 


Net working capital may be defined as the:


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