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प्रश्न
Answer the question.
Briefly explain any four types of working capital required by a business concern.
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उत्तर
Working capital means the capital invested in working assets or current assets such as cash, stock of goods, debtors and short term investments, etc.
The various types of working capital are:
Permanent Working Capital: It refers to the minimum amount of working capital required permanently to operate the minimum level of business activity. It determines the financing requirement in the case of fixed assets is simply the cost of the asset. It is of two types: Initial and Regular working capital.
Variable Working Capital: It is the difference between networking capital and permanent working capital. The amount of temporary’ working capital depends upon the extent of extra demand in season. It is of two types: seasonal and special working capital.
Gross Working Capital: Gross working capital refers to the total amount of funds invested in the current assets.
Gross Working Capital = Book value of current assets Working Capital: Networking capital means the excess of current assets over current liabilities. Current assets include cash at bank, sundry’ debtors, cash in hand, bills receivable, etc. Current liabilities include bills payable, sundry creditors, short term loans, etc.
Net Working Capital = Current assets – Current liabilities
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संबंधित प्रश्न
Explain briefly any four factors that affect the working capital requirement of a company.
Explain the following as factors affecting the requirements of fixed capital:
Financing alternatives
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.
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
Amrit is running a ‘transport service’ and earning good returns by providing this service to industries. Giving reason, state whether the working capital requirement of the firm will be ‘less’ or ‘more’.
What is working capital? Discuss five important determinants of working capital requirement?
Explain any four factors that affect the capital structure of a company.
Higher working capital usually results in :
Current assets of a business firm should be financed through
Which of the following factors highlight the importance of capital budgeting decisions
