Advertisements
Advertisements
Question
Explain the following as factors affecting the requirements of working capital:
Scale of operations
Advertisements
Solution
Working capital refers to current assets which help in day-to-day business operations.
The scale of operations: A company which is operating in a large-scale of operations will require larger fixed assets in the form of plants, land and building.
Larger organisation ⇒ Higher investment in fixed assets
Small organisation ⇒ Lower investment in fixed assets
APPEARS IN
RELATED QUESTIONS
Answer the following question:
The Return on Investment (ROI) of a company ranges between 10 - 12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt:
Option ‘A’: Rate of interest 9%
Option ‘B’: Rate of interest 13%
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your answer. Also, state the concept being used in taking the decision.
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 requirements of fixed capital:
Technology upgradation
Explain the following as factors affecting the requirements of working capital:
Nature of business
Explain the following as factors affecting the requirement of working capital:
The credit allowed and availed
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.
Fixed Capital Working Capital
Answer the question.
Briefly explain any four types of working capital required by a business concern.
What is meant by capital gearing ratio?
Current assets are those assets which get converted into cash
Higher dividend per share is associated with
______ of a firm refers to those assets which can be converted into cash or cash equivalents in a short period of time.
______ refers to the decisions regarding where to invest so as to earn the highest possible returns on investment.
Fixed capital is financed through:
When XYZ company acquired a toy manufacturing company, it paid a large amount for the goodwill. Which source of business funds of XYZ company was impacted?
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
