Factors Influencing Working Capital Management

Topics:
Working Capital
Tags:
CiteMan Network,
Finance,
Managerial Accounting,
Working Capital,
Working Capital Requirement
Source:
CiteMan Network

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Overview: The working capital needs of a firm are influenced by numerous factors. The important ones are: nature of business; seasonality of operations; production conditions; market conditions; conditions of supply. The working capital requirement of a firm is closely related to the nature of its business. A service firm, like an electricity undertaking or a transport corporation, which has a short operating cycle and which sells predominantly on cash basis, has a modest working capital requirement. On the other hand, a manufacturing concern like a machine tools unit, which has a long operating cycle and which sells largely on credit, has a very substantial working capital requirement.

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Format: HTML | Date: Jul 2008 | Pages: 5


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