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Amrit is Running a ‘Transport Service’ and Earning Good Returns by Providing this Service to Industries. - Business Studies

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ConceptConcept of Fixed and Working Capital

Question

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’.

Solution

Working capital is the amount of capital required for meeting the day-to-day operations of the business. In this case, Amrit runs a Transport Service. This business operates on a large scale of operation, with a higher amount of inventory. He would require a large amount to working capital.

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Solution Amrit is Running a ‘Transport Service’ and Earning Good Returns by Providing this Service to Industries. Concept: Concept of Fixed and Working Capital.
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