6

Working Capital

LEARNING OBJECTIVES

On completion of the study of the chapter, you should be able to understand:

  • What is Working Capital?

  • Need and importance of Working Capital.

  • Different concepts and classification of Working Capital.

  • Sources of Working Capital.

  • Determinants of Working Capital.

  • Components of Working Capital.

  • Working Capital or Operating cycle.

  • Forecasting or Estimation of Working Capital.

  • Valuation of work-in-process.

6.1 MEANING AND CONCEPT OF WORKING CAPITAL

Working Capital refers to the portion of capital which is employed in the business to carry on its day-to-day activities. It is used by the business to perform its operating activities. Therefore, the capital invested into the business to carry on the continuous ...

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