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Working Capital Management & Financing: Group 1: AHAJA, Soraya ALFARO, Danica ALVARADO, Khevin
Working Capital Management & Financing: Group 1: AHAJA, Soraya ALFARO, Danica ALVARADO, Khevin
Management &
Financing
GROUP 1:
AHAJA, Soraya
ALFARO, Danica
ALVARADO, Khevin
What is Working Capital Policy?
• The working capital of a firm basically depend upon the nature of its business. It may
be said that public utility undertakings require small amount of working capital, trading
and financial firms require relatively very large amount, whereas manufacturing
undertakings require sizable working capital between these two extremes
• The working capital requirements of a concern are directly influenced by the size of its
business which may be measured in terms of scale of operations. Greater the size of a
business unit, generally larger will be the requirements of working capita
3.Manufacturing Process/Length of Production Cycle
• Working capital increase is directly proportional to the length of manufacturing
process
• Longer the process period of manufacture, larger is the amount of working
capital required
• Rising prices will require the firm to maintain larger amount of working capital
as more funds will be required to maintain the same current assets
Real Life Sample
https://www.yourarticlelibrary.com/accounting/working-capital-management/determination/top-13-factors-that-
determine-the-working-capital-financial-analysis/68019#:~:text=Credit%20Policy%3A,lesser%20amount%20of
%20working%20capital