1. Nature of business: The amount of working capital requirement basically depends on the nature of the business. Due to the cash nature of the transactions in the business. Some business requires huge working capital and some need little working capital for their operations.

2. Scale of Operations: The requirement of working capital also depends upon the scale of operation. Small Scale operations need less working capital when compared to large scale operations.

3. Growth & Expansion: As the organizations grow it requires a large amount of working capital in order to meet higher production and sales targets. With the growth & expansion, the business needs more & more working capital to meet the day to day requirements of the organization.

4. Business cycle: The amount of working capital required by a concern varies with the changes in the phases of business cycle. During Boom period the demand for the product increases and results in higher working capital requirements. On the other hand during recession and depression demand for the products decreases results in lower working capital requirements.

5. Seasonal factors: The working capital requirement also influenced by the seasonal fluctuation in demand for the products. During peak seasons, the working capital requirement in more due to higher level of activity. On the contrary, during lean seasons the requirement of the working capital will be less.