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प्रश्न
Why is working capital also known as circulating capital?
उत्तर
Working capital is the portion of capital invested in the short-term assets of a business. It consists of cash receipts from sales which are used to cover the cost of current operations. It is also known as circulating capital as it keeps circulating or revolving in business. It is invested, recovered and reinvested repeatedly during the business cycle.
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संबंधित प्रश्न
Explain the following as factors affecting the requirements of fixed capital:
Technology upgradation
Explain the following as factors affecting the requirements of working capital:
Scale of operations
Explain the following as factors affecting the requirements of working capital:
Seasonal factors
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
Write a word or a term or a phrase which can substitute the following statement :
The difference between current assets and current liabilities.
Current assets are those assets which get converted into cash
Working capital is calculated as?
______ decision involves the decision regarding the distribution of profit or surplus of the company.
Dhaval Acharya, after acquiring a bachelor’s degree in Hotel Management joined his father’s chain of vegetarian restaurants in Ahmednagar. Being young and enterprising, he suggested his father to add a new section of vegetarian bakery items which required an investment of ₹ 5 crores. His father Mr. Aariketh Acharya suggested him to take the decision with caution and understood everything comprehensively as bad decision may damage the financial fortune of business.
Identify the decision suggested by Mr. Aariketh Acharya. State by giving any three reasons as to why he must have advised his son to take decision with caution.
