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प्रश्न
Explain the following as factors affecting the requirements of working capital:
Seasonal factors
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उत्तर
Working capital refers to current assets which help in day-to-day business operations.
Seasonal factors: A company selling seasonal products will require high working capital to meet higher sale, higher production, higher stock and more debtors. While a company selling goods throughout the season will require constant working capital which is low working capital spread throughout the season.
Peak season ⇒ High working capital
Lean season ⇒ Low working capital
संबंधित प्रश्न
Explain the following as factors affecting the requirements of working capital:
Scale of operations
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’.
Fixed Capital Working Capital
What is meant by capital gearing ratio?
Why is working capital also known as circulating capital?
Companies with a higher growth potential are likely to
Higher dividend per share is associated with
What are the important determinants of working capital requirement?
______ refers to the decisions regarding where to invest so as to earn the highest possible returns on investment.
______ involve identifying various sources of funds and deciding the best combination for raising the funds.
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.
What is fixed capital?
How does the Nature of Business affect fixed capital requirement?
What is the effect of a larger Scale of Operations on fixed capital?
How does fast obsolescence under Technology Upgradation affect fixed capital requirement?
What is the effect of higher expected growth on fixed capital?
How does leasing affect fixed capital requirement?
How does the Level of Collaboration affect each firm's fixed asset investment?
