Following are the factors affecting working capital requirement of a company:

1. Nature of Business: The basic nature of a business influences the amount of working capital required. A trading organisation usually needs a smaller amount of working capital compared to a manufacturing organisation.

2. Scale of Operations: For organisations which operate on a higher scale of operation, the quantum of inventory and debtors required is generally high. Such organisations, therefore, require large amounts of working capital as compared to the organisations which operate on a lower scale.

3. Business Cycle: Different phases of business cycles affect the requirement of working capital by a firm. In case of a boom, the sales as well as production are likely to be larger and, therefore, a larger amount of working capital is required.

4. Seasonal Factors: Most businesses have some seasonality in their operations. In peak season, because of higher levels of activity, larger amounts of working capital is required.

5. Production Cycle: Production cycle is the time span between the receipt the receipt of raw material and their conversion into finished goods.

6. Credit Allowed: Different firms allow different credit terms to their customers. These depend upon the level of competition that a firm faces as well as the credit worthiness of their clientele.

7. Operating Efficiency: Firms manage their operations with varied degree of efficiency.

8. Availability of Raw material: Higher the quantity of material to be stored, higher the amount of working capital required.

9. Growth Prospects: If the growth potential of a concern is perceived to be higher, it will require a higher amount of working capital.

10. Level of competition: Higher level of competitiveness may necessitate higher stocks of finished goods to meet urgent orders from customers.