Working Capital NeedWhich company has a higher operating working capital need?Hint: You cannot directly compare absolute working capital for companies of different scales.Company ACompany B

State whether we require more or less working capital in the following cases: (3)i) A company manufacturing iron and steelii) A biscuit manufacturing company having high turnover of inventoryiii) A large-sized business enterprise making toysiv) A company manufacturing furniture against orders only.v) A company manufacturing fansvi) A company following strict credit pol

operating working capital

The capital structure across different industries is Blank______.Multiple choice question.differentthe same

A company has higher inventory days and lower fixed asset turnover ratio than its peerThe company is more efficient only in managing its inventoryThe company is more efficient in managing its inventory and utilising its fixed assetsThe company is less efficient in managing its inventory and in utilising its fixed assetsThe company is more efficient only in utilising its fixed assets

What is working capital ? What are the factors that aretaken into account in determining capital needs of thefirm ?b) Explain how a suitable mix of short-term and long-termfinance can be used for financing current assets. 7 + 88. a) Cosco Industries have a policy of maintainingRs. 5,00,000 minimum cash balance. The standarddeviation of the company’s daily cash flow isRs. 2,00,000. The interest rate is 14%. The companyhas to spend Rs. 150 per transaction. Calculate theupper and lower limits and the return point as perMiller-Orr Model.b) A firm’s annual cash requirement is Rs. 2,00,00,000.The opportunity cost of capital is 15% per annum.Rs. 150 is the per transaction cost for the firm when itconverts its short-term securities to cash. Find out theoptimum cash balance. What is the annual cost of thedemand for the optimum cash balance ? 7 + 8