Archive | Working Capital

Working Capital: Meaning, Concepts and Diagrams

The below mentioned article provides a study note on Working Capital:- 1. Meaning of Working Capital 2. Concepts of Working Capital 3. Permanent and Temporary 4. Adequate but Not Excessive. Meaning of Working Capital: Working capital is that part of a firm’s capital which is required to hold current assets of the firm. Examples of […]

Determining Working Capital Requirements

The following points highlight the twelve major factors determining working capital requirements. The factors are: 1. Nature of Business 2. Size of Business 3. Manufacturing Cycle 4. Production Policy 5. Business Cycles 6. Conditions of Supply of Raw Material 7. Terms of Credit to Customers 8. Credit from Suppliers 9. Stock Turnover Ratio 10. Price […]

Limitations of Working Capital Concept of Funds

In this article we will discuss about the limitations of working capital concept of funds. One of the limitations of working capital concept of funds is that it omits a few major financial and investment transactions. Important information regarding changes in the resources of the firm and in the financial structure of the firm are […]

Working Capital: Meaning, Sources and Uses

In this article we will discuss about Working Capital:- 1. Meaning of Working Capital 2. Sources of Working Capital 3. Uses. Meaning of Working Capital: In common usage, the term funds means cash. However, accountants and financial executives think of ‘funds’ in a broader sense. They view the funds available to a business enterprise as […]

Term Loan: Meaning, Feature and Appraisal Procedure

After reading this article you will learn about Term Loan:- 1. Meaning of Term Loans 2. Features of Term Loans 3. Financial Institutions 4. Appraisal Procedure for Granting Term Loan. Meaning of Term Loans: The medium or long-term loans are popularly known as ‘Term loans’ which are provided by the specialized financial institutions specially set […]

Top 5 Committees to Control the Regulation of Bank Finance

This article throws light upon the top five committees to control the regulation to bank finance. The committees are: 1. Dehejia Committee 2. Tandon Committee 3. Chore Committee 4. Martha Committee 5. Chakraborty Committee. 1. Dehejia Committee: The National Credit Council (NCC) was constituted in October, 1968, under the Chairmanship of V.T Dehejia to examine […]

Management of Debtors in India

After reading this article you will learn about the Management of Debtors in India:- 1. Introduction to Management of Debtors 2. Objectives of Management of Debtors 3. Cost of Maintaining Debtors 4. Factors Affecting Size 5. Credit Procedure/Evaluation 6. Benefits of Credit Extension 7. Cash Discount 8. Credit Control System and its Effectiveness. Contents: Introduction […]

Liquidity and Profitability| Working Capital

This article provides a short note on Liquidity and Profitability:- 1. Meaning of Liquidity 2. Measurement of Liquidity 3. Meaning of Profitability 4. Liquidity-Profitability Tangle. Meaning of Liquidity: Liquidity means one’s ability to meet claims and obligations as and when they become due. In the context of an asset, it implies convertibility of the same […]

Top 3 Factors for Financing Current Assets | Working Capital

This article throws light upon the top three factors for financing current assets. The factors are: 1. Flexibility 2. Risk 3. Cost of Financing. Financing Current Asset: Factor # 1. Flexibility: It is comparatively easy to repay short-term loans than long-term ones when the need for funds decreases. Long-term funds, e.g., debenture or preference share […]

Working Capital: Definition, Classification and Sources

After reading this article you will learn about Working Capital:- 1. Definition of Working Capital 2. Need for Working Capital 3. Classification 4. Determinants 5. Components 6. Financing 7. Inadequacy 8. Remedies 9. Assessing Working Capital Requirements 10. Operating Cycle (O. C.) Approach or Cash Working Capital Approach 11. Financing Working Capital. Contents: Definition of […]

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