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प्रश्न
Explain the following as factors affecting the requirement of working capital:
The credit allowed and availed
उत्तर
The credit allowed and availed: Credit means allowing the sale of goods without immediate cash payment, and hence, the number of debtors increases and in turn the requirement of working capital will increase. A strict credit policy will reduce the requirement of working capital.
Credit allowed
Liberal credit policy ⇒ High working capital
Strict credit policy ⇒ Low working capital
Credit availed
Difficult to avail credit from suppliers ⇒ High working capital
Easy to avail credit from suppliers ⇒ Low working capital
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संबंधित प्रश्न
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 working capital:
Seasonal factors
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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.
Fixed Capital Working Capital
Explain any four factors that affect the capital structure of a company.
Companies with a higher growth potential are likely to
Higher working capital usually results in :
Higher dividend per share is associated with
Current assets of a business firm should be financed through
What are the important determinants of working capital requirement?
______ 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.
______ 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.
Read the following text and answer the following question on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
"Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%)." The proportion of debt in the overall capital is called ______.
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
