Question

Discuss importance of advantage or needs of working capital

Answer 1

Heya✌️✌️✌️

Here you go ⬇️⬇️⬇️
Working capital is the life nerve and blood Centre of the business. Working capital is very essential to maintain smooth running of a business. No business can run successfully without an adequate amount of working capital. The main advantages or importance of working capital are as follows:




⭕    Solvency of the business: Adequate working capital helps in maintaining the solvency of the business by providing uninterrupted of production.


⭕   Goodwill:           Sufficient amount of working capital enables a firm to make prompt payment and makes and maintain the goodwill.


⭕ Easy loan:          Adequate working capital leads to high solvency  and credit standing can arrange loans from banks and other on easy and favourable terms,


⭕   Cash discounts:Adequate working capital also enables a concern to avail cash discount on the purchase and hence reduces cost.
Working capital is the life blood and nerve center of business. Working capital is very essential to maintain smooth running of a business. No business can run successfully without an adequate amount of working capital. The main advantages or importance of working capital are as follows:




⭕Smooth Business Operation
Working capital is really a life blood of any business organization which maintains the firm in well condition. Any day to day financial requirement can be met without any shortage of fund. All expenses and current liabilities are paid on time.


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