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प्रश्न
Justify the following statement.
The nature of business affects the working capital requirement.
उत्तर
There are no precise standards to measure working capital adequacy. Management has to determine the size of working capital in light of certain aspects of the business firm and the economic environment within which the firm operates. Firms engaged in manufacturing essential products of daily consumption would need relatively less working capital as there would be constant and sufficient cash inflow in the firm to take care of liabilities. Likewise, public utility concerns have to maintain a small working capital because of a continuous flow of cash from their customers. On the contrary, if the business is dealing in Luxurious products, it requires a huge amount of working capital as the sale of Luxurious items is not frequent. Trading/merchandising firms that are concerned with the distribution of goods have to carry big inventories of goods to meet customers' demands and have to extend credit facilities to attract customers. Hence, they need a large amount of working capital.
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संबंधित प्रश्न
Select the correct answer from the options given below and rewrite the statement.
______ refers to any kind of fixed asset.
Select the correct answer from the options given below and rewrite the statement.
______ refers to the excess of current assets over current liabilities.
Write a word or a term or a phrase which can substitute the following statement.
Capital needed to acquire fixed assets which are used for longer period of time.
Write a word or a term or a phrase which can substitute the following statement.
The excess of current assets over current liabilities.
Write a word or a term or a phrase which can substitute the following statement.
The process of converting raw material into finished goods.
State whether the following statement is true or false.
The business dealing in luxurious products will require huge amount of working capital.
State whether the following statement is true or false.
A firm with large scale operations will require more working capital.
Complete the sentence.
The process of converting raw material into finished goods is called ______
Explain the following term/concept.
Fixed capital
State any four factors affecting fixed capital requirement.
Justify the following statement.
There are various factors affecting the requirement of fixed capital.
Answer the following question.
Discuss the factors determining working capital requirement.
Explain the following term/concept:
Production Cycle
Explain the following term/concept in detail:
Overhead
Distinguish between the following.
Fixed Capital and Working Capital.
Explain the following term/concept:
Fixed capital
Liberal credit policy creates a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
Liberal credit policy creates a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
