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प्रश्न
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.
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उत्तर
Working capital is the amount of capital required for meeting the day-to-day operations of the business. In this case, Ramnath is purchasing the components of television on 3 months of credit, and selling the company's product in cash. His working capital requirement is reduced to the extent of credit availed by him.
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 working capital:
Nature of business
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:
Production cycle
How does working capital affect both the liquidity as well as profitability of a business?
Write a word or a term or a phrase which can substitute the following statement :
The difference between current assets and current liabilities.
Why is working capital also known as circulating capital?
Explain any four factors that affect the capital structure of a company.
Current assets are those assets which get converted into cash
Higher dividend per share is associated with
A fixed asset should be financed through
Which of the following factors highlight the importance of capital budgeting decisions
______ of a firm refers to those assets which can be converted into cash or cash equivalents in a short period of time.
______ refers to the decisions regarding where to invest so as to earn the highest possible returns on investment.
______ decision involves the decision regarding the distribution of profit or surplus of the company.
Fixed capital is financed through:
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?
