Question

What do you mean by Working Capital ? Enumerate various factors which affect the demand of Working Capital in a Business concern.

Answer 1

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The capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.

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Now let's discuss factors determining working capital requirements. The amount of working capital required depends on the kind or nature of business a company performs: In case of public utilities, less capital is required. It is so, since, they don't have any stock in trade and they sell on a cash basis.

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