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प्रश्न
Explain the following as factors affecting the requirement of working capital:
The credit allowed and availed
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उत्तर
The credit allowed and availed: Credit means allowing the sale of goods without immediate cash payment, and hence, the number of debtors increases and in turn the requirement of working capital will increase. A strict credit policy will reduce the requirement of working capital.
Credit allowed
Liberal credit policy ⇒ High working capital
Strict credit policy ⇒ Low working capital
Credit availed
Difficult to avail credit from suppliers ⇒ High working capital
Easy to avail credit from suppliers ⇒ Low working capital
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संबंधित प्रश्न
Explain the following as factor affecting the requirements of fixed capital:
Scale of operations
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:
Scale of operations
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
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?
What is working capital? Discuss five important determinants of working capital requirement?
Write a word or a term or a phrase which can substitute the following statement :
The difference between current assets and current liabilities.
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?
Companies with a higher growth potential are likely to
Higher working capital usually results in :
Current assets are those assets which get converted into cash
Current assets of a business firm should be financed through
Which of the following factors highlight the importance of capital budgeting decisions
Working capital is calculated as?
Assertion (A): A commercial bill is a bill of exchange used to finance the working capital requirements of business firms.
Reason (R): Commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.
Dhaval Acharya, after acquiring a bachelor’s degree in Hotel Management joined his father’s chain of vegetarian restaurants in Ahmednagar. Being young and enterprising, he suggested his father to add a new section of vegetarian bakery items which required an investment of ₹ 5 crores. His father Mr. Aariketh Acharya suggested him to take the decision with caution and understood everything comprehensively as bad decision may damage the financial fortune of business.
Identify the decision suggested by Mr. Aariketh Acharya. State by giving any three reasons as to why he must have advised his son to take decision with caution.
