Mention any three factors affecting the working capital requirement.

1.	Mention any three factors affecting the working capital requirement.
Answer» Following are the main factor affecting the working capital:- (1) Nature of Business: - The nature of business is the important factor affecting or determining the quantity of working capital. The manufacturing and commercial units where sufficient goods is to be kept on stock and sell is done on crest working capital has to be kept more. (2) Length of manufacturing Process: - If the manufacturing process takes more time than it takes more time, more cost and more labour in manufacturing goods. As a result, more quantity of working capital is needed. On contrary if the period of the manufacturing process is less, the less quantity of working capitals needed.

Answer»

Following are the main factor affecting the working capital:-

(1) Nature of Business: - The nature of business is the important factor affecting or determining the quantity of working capital. The manufacturing and commercial units where sufficient goods is to be kept on stock and sell is done on crest working capital has to be kept more.

(2) Length of manufacturing Process: - If the manufacturing process takes more time than it takes more time, more cost and more labour in manufacturing goods. As a result, more quantity of working capital is needed. On contrary if the period of the manufacturing process is less, the less quantity of working capitals needed.

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