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What is the sources of working capital?
Also known as capital employed its the total long term finance injected in the business i.e. Long term debt + equity
An aggressive working capital policy has what characteristics?
An aggressive working capital policy has various characteristics. The main characteristic is having a high ratio of short-term debt to long-term sources of funds.
Sources of share capital?
There are many sources of capital, main sources are as follows:1 - short term sources2 - long term sources1 - short term sources like banks or financial institutions2 - long term sources like debt, public issuance etc.
Difference between working capital and working capital margin?
Working capital is a company's short term financial well being and efficiency. Working capital margin is a sum of the company's gross working assets over the long term.
Long term finance sources?
Following are long term finance source:Bonds issueDebenturesIssuance of share capital
What is fixed and working capital?
Fixed capital is something that is need for long term ...working capital is the capital or funds for managing and carrying out day to day operations. Apart from this a important point to note is that usually fixed assets or long term assets of the company are bought from fixed capital. Buying short term current assets from funds for long term would be illogical.
Is short term borrowing a source of working capital?
Yes companies has two types of source of working capital available short term as well as long term borrowing. Short term borrowings has less percentage of interest due to less risk then long term borrowings.
Should you borrow on a long-term basis or short-term basis to raise immediate capital?
immediate capital may be for short term (working capital) or long term ( for expansion) . For long term borrowing the process may take long time. so for immediate requirement i prefer only short term loan.
What is non-working capital?
Non-working capital refers to the portion of a company's capital that is not tied up in its day-to-day operations. This includes long-term investments, fixed assets like property and equipment, and other resources that are not easily converted into cash or used for immediate operational needs. Essentially, non-working capital is focused on long-term growth and stability rather than short-term liquidity. It contrasts with working capital, which is used for managing current assets and liabilities.
What is a asset utilization ratio?
Sales over Operating assets /which are long term +working capital/
Sources of finance for fixed assets and working capital of a business?
What is fixed capital in real terms? This fixed capital is money that the company possesses but does not have in cash. This can be tapped into by the sale of these fixed asset items but usually, fixed asset items are vital for the running of businesses. Working capital Working capital is completely different from fixed capital and it has a different relevance when looking at a business. Working capital is the moment on a balance sheet that is constantly moving. These are all short term investments and the money is said to be working in the way that it is generating more money and more capital to be put back into the business.
What are the long term sources of finance?
A business requires funds to purchase fixed assets like land and building, plant and machinery, furniture etc. These assets may be regarded as the foundation of a business. The capital required for these assets is called Fixed capital. A part of the working capital is also of a permanent nature. Funds required for this part of the working capital and for fixed capital is called long term finance. Various sources of long term finance are:1. Capital Market which includes stock market and bond market.2. Financial Institutions like IDBI, ICICI3. Investment institutions like mutual funds, UTI4. Leasing through banks or other sources5. Foreign institutions like World Bank6. By making collaborations with foreign companies7. From NRI's (Non Resident Indians)8. Retained profits
