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प्रश्न
What is working capital?
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उत्तर
Working capital is that part of firm’s capital which is required for financing the short term or current asset. The working capital is also known as revolving capital or circulating capital or short term capital.
It is the amount of funds needed to meet the day to day operations of a business; it can be described as the excess of current assets over current liabilities.
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संबंधित प्रश्न
Match the pairs
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Group A |
Group B |
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a. Fixed Capital |
1. Owned Capital |
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b, Overdraft facility |
2. Bearer document |
|
c. Share certificate |
3. Investment in fixed assets |
|
d. Debentures |
4. Current Account |
|
e. Return on shares |
5. Application Money |
|
|
6. Dividend |
|
7. Investment in current assets |
|
|
8. Borrowed capital |
|
|
9. Savings Account |
|
|
10. Registered Document |
Explain briefly any four factors that affect the working capital requirement of a company.
Explain the following as factor affecting the requirements of fixed capital:
Choice of technique
Explain the following as factors affecting the requirement of working capital:
The credit allowed and availed
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’.
How does working capital affect both the liquidity as well as profitability of a business?
What is meant by capital gearing ratio?
Why is working capital also known as circulating capital?
______ of a firm refers to those assets which can be converted into cash or cash equivalents in a short period of time.
______ involve identifying various sources of funds and deciding the best combination for raising the funds.
______ decision involves the decision regarding the distribution of profit or surplus of the company.
Net working capital may be defined as the:
Fixed capital is financed through:
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.
Which group consists of current assets?
What are decisions about investment in long-term assets called?
What does the risk of capital budgeting decisions affect?
What is the effect of a larger Scale of Operations on fixed capital?
What is the effect of higher expected growth on fixed capital?
