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What are the sources of working capital?

What are the sources of working capital?

Spontaneous working capital are majorly derived from trade credit including notes payable and bills payable while short term working capital sources include dividend or tax provisions, cash credit, public deposits, trade deposits, short-term loans, bills discounting, inter-corporate loans and also commercial paper.

What is working capital give example?

Cash, inventory, accounts receivable and cash equivalents are some of the examples of the working capitals. These are the money a corporation has in its bank account as well as the assets it can convert to cash if needed. Some of the examples of the working capitals are inventory, cash etc.

What are the sources of working capital Mcq?

Working Capital is the difference between a company’s current assets i.e. accounts receivable, cash, inventories of raw material and fixed goods, and its current liabilities i.e. accounts payable, short-term debt, dividend, etc.

What are the four sources of working capital?

Sources of Working Capital

  • Tax Provisions.
  • Dividend Provisions.
  • Bank Overdrafts,
  • Cash Credits,
  • Trade Deposits,
  • Bills Discounting,
  • Short-term Loans or Working Capital Loans,
  • Inter-corporate Loans,

What are the examples of working capital Class 9?

Working capital includes raw supplies, inventory, and money that must be utilized to pay workers’ wages and meet day-to-day expenses.

What is working capital What are the sources and determinants of working capital?

The determinants of working capital are items that have a direct impact on the amount invested in current assets and current liabilities. If a business offers easy credit terms to its customers, the company is investing in accounts receivable that may be outstanding for a long time.

What are the uses of working capital?

Working capital is used to cover all of a company’s short-term expenses, including inventory, payments on short-term debt and operating expenses. Basically, working capital is used to keep a business operating smoothly and meet all its financial obligations within the coming year.

What is long term working capital?

A long term working capital is a loan that has a tenor of more than 12 months.

What is working capital financing?

Working Capital Financing. Working capital financing is financing that comes from the net profits a company earns; it is the revenue that remains after the company’s current debts or obligations are paid. Examples include cash, receivables, inventory and assets. Working capital has important uses in meeting the daily expenses of the company,…

What is working capital facility?

Working Capital Facility means a committed or uncommitted revolving credit facility entered into by the Borrower or a Subsidiary to obtain working capital financing in the ordinary course of business.

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