Question

What are the factors influenceing on working capital?

Answer 1

The management of working capital is completely different from industry to industry. A simple comparison of the service industry and manufacturing industry can clarify the point. In the service industry, there is no inventory and therefore, one big component of working capital is already avoided. So, the nature of the industry is a factor in determining the working capital requirement.

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Answer 2

Explanation:

Factors affecting working capital requirements

• Nature of business,
• Size of business,
• Time and complexities of manufacturing process,
• Manufacturing cost,
• Growth and Expansion,
• Terms of purchase and sales,
• Conditions of supply,
• Market conditions,