Working capital in a business is needed because of the operating cycle. But the need for working capital does not come to an end after the cycle is completed. Since the operating cycle is a continuous process, there remains a need for continuous supply of working capital. However, the amount of working capital required is not constant throughout the year, [...]
Everything you need to know about the sources of working capital. Working Capital is defined as the "excess of current assets over current liabilities and provisions." According to Shubin “working capital is the amount of funds necessary for the cost of operating the enterprise. Working capital in a going concern is a revolving fund. It consists of cash receipts from [...]
There are four methods for estimating the working capital requirements of a firm. The methods are: 1. Percentage of Sales Method 2. Regression Analysis Method 3. Operating Cycle Method 4. Individual Components Method. 1. Percentage of Sales Method: It is a traditional and simple method of determining the level of working capital and its components. In this method, working capital [...]