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प्रश्न
Explain the following as factors affecting the requirements of working capital:
Scale of operations
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उत्तर
Working capital refers to current assets which help in day-to-day business operations.
The scale of operations: A company which is operating in a large-scale of operations will require larger fixed assets in the form of plants, land and building.
Larger organisation ⇒ Higher investment in fixed assets
Small organisation ⇒ Lower investment in fixed assets
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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 |
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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 |
Answer the following question:
The Return on Investment (ROI) of a company ranges between 10 - 12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt:
Option ‘A’: Rate of interest 9%
Option ‘B’: Rate of interest 13%
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your answer. Also, state the concept being used in taking the decision.
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:
Technology upgradation
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:
Production cycle
Explain the following as factors affecting the requirement of working capital:
The credit allowed and availed
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?
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?
Current assets are those assets which get converted into cash
______ 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?
______ refers to the decisions regarding where to invest so as to earn the highest possible returns on investment.
Net working capital may be defined as the:
When XYZ company acquired a toy manufacturing company, it paid a large amount for the goodwill. Which source of business funds of XYZ company was impacted?
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
