Advertisements
Advertisements
प्रश्न
Justify the following statement.
The nature of business affects the working capital requirement.
Advertisements
उत्तर
There are no precise standards to measure working capital adequacy. Management has to determine the size of working capital in light of certain aspects of the business firm and the economic environment within which the firm operates. Firms engaged in manufacturing essential products of daily consumption would need relatively less working capital as there would be constant and sufficient cash inflow in the firm to take care of liabilities. Likewise, public utility concerns have to maintain a small working capital because of a continuous flow of cash from their customers. On the contrary, if the business is dealing in Luxurious products, it requires a huge amount of working capital as the sale of Luxurious items is not frequent. Trading/merchandising firms that are concerned with the distribution of goods have to carry big inventories of goods to meet customers' demands and have to extend credit facilities to attract customers. Hence, they need a large amount of working capital.
APPEARS IN
संबंधित प्रश्न
Select the correct answer from the options given below and rewrite the statement.
______ refers to the excess of current assets over current liabilities.
Select the correct answer from the options given below and rewrite the statement.
When the population is increasing at high rate, certain manufacturers find this as an opportunity to ______ business.
Write a word or a term or a phrase which can substitute the following statement.
The boom and recession cycle in the economy
Fixed capital is also referred as circulating capital.
State whether the following statement is true or false.
The business will require huge funds if assets are acquired on a lease basis.
Initial planning of capital requirement is made by______.
Explain the following term/concept.
Working capital
Justify the following statement.
Fixed capital stays in the business almost permanently.
Justify the following statement.
There are various factors affecting the requirement of working capital.
Fixed capital is also referred as circulating capital.
Explain the following term/concept in detail:
Overhead
Distinguish between the following.
Fixed Capital and Working Capital.
Distinguish between the following.
Fixed Capital and Working Capital.
Explain the following term/concept:
Fixed capital
Liberal credit policy creates a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
Distinguish between the following.
Fixed Capital and Working Capital.
Liberal credit policy creates a problem of bad debts.
