Question

Multiple Choice Question:

Funds required for purchasing current assets is an example of ______

Options

• Fixed capital requirement

• Ploughing back of profits

• Working capital requirement

• Lease financing

Answer 1

Current assets are generally used for the day-to-day operations of a business. The funds that a company requires for undertaking day-to-day operations, such as the purchase of raw materials and payment of wages and salaries, are part of its working capital requirements. Thus, the funds that a firm requires for purchasing current assets are part of its working capital requirements.

Hence, the correct answer is option Working capital requirement.