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प्रश्न
Ramu is buying and selling ice-cream.Explain his working capital requirement.
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उत्तर
Ramu is a trading entrepreneur.
- Trading entrepreneur is one who undertake trading activities, whether domestic or overseas.
- They deal in buying and selling of manufactured goods.
- Before launching the business they identify the potential market for his product in order to stimulate the demand.
They believe in creating a demand in the market to market survey and push many ideas ahead of others in the form of demonstration to promote
Operating cycle or cash conversion cycle for trading business:
- Money needed to fund the normal, day to day operations of a business is known as the Working Capital.
- For trading, where there is no manufacturing (or conversion), the operating cycle will be shorter.
- Ramu needs less amount of working capital as ice-cream is a perishable goods and can’t keep for a long time period.
- Therefore, Ramu has to purchase and sale of goods through cash only.
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संबंधित प्रश्न
Explain the following term with proper example:
SKU
Explain the two dominant forms of budgeting process.
. What is working capital? What is the need for a working capital?
Given below are information obtained from the balance sheet of PQR ltd., What will be the gross working capital for PQR ltd. for the year ending 31st March 2022?
- Assets: (in Rupees)
- Cash - 60,000
- Stock - 50,000
- Trade Debtors - 65,000
- Short-term investment - 15,000
- Liabilities: (in Rupees)
- Short-term loans - 25,000
- Trade creditors - 5,000
- Outstanding expenses - 10,000
What will be the Net Working Capital of Sukhom Ltd. from the given data?
| Cash | Rs. 2,00,000 |
| Account Receivables | Rs. 1,50,000 |
| Account Payables | Rs. 65,000 |
| Inventory | Rs. 3,00,000 |
| Short term borrowings | Rs. 1,00,000 |
| Outstanding Salaries | Rs. 50,000 |
How do current assets compare with fixed assets in liquidity and returns?
Which current asset comes first in order of liquidity?
Which current asset follows Work in progress in order of liquidity?
Which current asset comes last in order of liquidity?
Which balance should a business maintain when managing current assets?
Which of the following is a current liability?
Which of the following is an example of current liabilities?
What finances part of current assets through short-term sources?
Which firms require less working capital than manufacturing firms?
What is the effect of Boom in the Business Cycle on working capital?
What is the effect of Depression in the Business Cycle on working capital?
How does Peak season affect working capital requirement?
How does lean season affect working capital requirement?
How does a longer Production Cycle affect working capital?
What is the effect of irregular raw material supply or longer lead time on working capital?
