Tag Archives | Business

Reasons for Centralizing Finance Function

The argument in favour of centralizing the finance function is based on the following reasons:- 1. Strategic Decisions 2. Cash-Flow 3. External Orientation 4. Coordination 5. Financial Discipline 6. Information Flow. Reason # 1. Strategic Decisions: Many of the strategic decisions like setting up of financial goals, investment in capital projects, raising of finances through […]

Top 10 Sources of Working Capital Finance | Business

The following points highlight the top ten sources of working capital finance. The sources are: 1. Intercorporate Loans and Deposits 2. Commercial Paper (CP) 3. Funds Generated from Operations 4. Retained Profit 5. Depreciation Provision 6. Amortisation Provisions 7. Deferred Tax Payments 8. Accrued Expenses 9. Deposits and Advances 10. Public Deposits. Source # 1. […]

Working Capital Management Strategies

The following points highlight the top approaches of working capital management strategies. They are:- 1. Conservative Approach 2. Aggressive Approach 3. Matching Approach 4. Zero Working Capital Approach 5. Working Capital Policies. 1. Conservative Approach: A conservative strategy suggests not to take any risk in working capital management and to carry high levels of current […]

Working Capital: Meaning and Components | Business

In this article we will discuss about:- 1. Meaning of Working Capital 2. Components of Working Capital 3. Gross and Net Working Capital 4. Permanent and Temporary Working Capital 5. Positive and Negative Working Capital 6. Objectives. Meaning of Working Capital: Working capital management is a significant in financial management due to the fact that […]

Overtrading and Under Capitalization | Working Capital

In this article we will discuss about the impact of overtrading, under capitalization on working capital. Impact of Overtrading on Working Capital: Overtrading arises when a business expands beyond the level of funds available. Overtrade means an attempt to finance a certain volume of production and sales with inadequate working capital. If the company does […]

Working Capital Requirement of a Business

In this article we will discuss about the working capital requirements of a business. Factors Determining Working Capital Requirement: There is no set of universally applicable rules to ascertain working capital needs of a business organization. The factors which influence the need level are discussed below: a. Nature of business: If we look at the […]

Operating and Non-Operating Activities of Business

In this article we will discuss about operating and non-operating activities of business. Operating activities are the central means by which the enterprise is expected to obtain income and cash in the future. Results of central, continuing operations, therefore, have a different significance from results associated with other non-recurring activities and events. No definition of […]

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