Margin money is the promoter's stake and it works as a safety cushion to the bank's or state financial corporations extending working capital assistance
Capital is money. "Working capital" is money that is available for the day-to-day operation of a business or enterprise. A business might have assets in the building, equipment, fixtures or inventories, but that "worth" is not "liquid." Working capital is money that is available to buy goods, make payroll and grow the business while waiting for other receivables to come in.
Business working capital is the money a business needs for day to day operations. However, a good understanding of cash flow is important as well to run a good business.
traders borrowing money from their brokers
Requirements Of working capital depend upon various factors such as nature of business, size of business, the flow of business activities. However, small organization relatively needs lesser working capital than the big business organization. Following are the factors which affect the working capital of a firm:1. Size Of BusinessWorking capital requirement of a firm is directly influenced by the size of its business operation. Big business organizations require more working capital than the small business organization. Therefore, the size of organization is one of the major determinants of working capital.2. Nature Of BusinessWorking capital requirement depends upon the nature of business carried by the firm. Normally, manufacturing industries and trading organizations need more working capital than in the service business organizations. A service sector does not require any amount of stock of goods. In service enterprises, there are less credit transactions. But in the manufacturing or trading firm, credit sales and advance related transactions are in large amount. So, they need more working capital.3. Storage Time Or Processing PeriodTime needed for keeping the stock in store is called storage period. The amount of working capital is influenced by the storage period. If storage period is high, a firm should keep more quantity of goods in store and hence requires more working capital. Similarly, if the processing time is more, then more stock of goods must be held in store as work-in-progress.4. Credit PeriodCredit period allowed to customers is also one of the major factors which influence the requirement of working capital. Longer credit period requires more investment in debtors and hence more working capital is needed.But, the firm which allows less credit period to customers needs less working capital.5. Seasonal RequirementIn certain business, raw material is not available throughout the year. Such business organizations have to buy raw material in bulk during the season to ensure an uninterrupted flow and process them during the entire year. Thus, a huge amount is blocked in the form of raw material inventories which gives rise to more working capital requirements.6. Potential Growth Or Expansion Of BusinessIf the business is to be extended in future, more working capital is required. More amount of working capital is required to meet the expansion need of business.7. Changes In Price LevelChange in price level also affects the working capital requirements. Generally, the rise in price will require the firm to maintain large amount of working capital as more funds will be required to maintain the sale level of current assets.8. Dividend PolicyThe dividend policy of the firm is an important determinant of working capital. The need for working capital can be met with the retained earning. If a firm retains more profit and distributes lower amount of dividend, it needs less working capital.9. Access To Money MarketIf a firm has good access to capital market, it can raise loan from bank and financial institutions. It results in minimization of need of working capital.10. Working Capital CycleWhen the working capital cycle of a firm is long, it will require larger amount of working capital. But, if working capital cycle is short, it will need less working capital.11. Operating EfficiencyThe operating efficiency of a firm also affects the firm's need of working capital. The operating efficiency of the firm results in optimum utilization of assets. The optimum utilization of assets in turn results in more fund release for working capital.
In todays economy, figure on zero profit margin, and your competition planning on negative margin. Basically paying money to keep the doors open
Pre-opening capital is money needed to start a business. Working capital is the money needed to keep a business running. Working capital, hopefully, is gained through the operation of the business as profit.
Pre-opening capital is money needed to start a business. Working capital is the money needed to keep a business running. Working capital, hopefully, is gained through the operation of the business as profit.
Share capital is equity in the company. It is money raised by the company in exchange for issuing ownership of shares. Working capital is the money that is borrowed from a bank for a business to pay operating expenses.
Human = People working Capital = Money
Capital is money. "Working capital" is money that is available for the day-to-day operation of a business or enterprise. A business might have assets in the building, equipment, fixtures or inventories, but that "worth" is not "liquid." Working capital is money that is available to buy goods, make payroll and grow the business while waiting for other receivables to come in.
Working Capital
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.
Working capital (also known as net working capital) is a financial metric which represents the amount of day-by-day operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities. A company can be endowed with assets and profitability, but short of liquidity, if these assets cannot readily be converted into cash.
Adequate working capital is when the owner of the business has money to run the business on a day to day basis.Inadequate working capital means that the owner of the business has no money to run the business on a day to day basis and will therefore force the owner of the business to go in for an overdraft.
The working capital of any business is called dough. Bakers make dough (money) by making dough (bread).
there is a need to invest in net working capital because net workin capital represents the surplus working capital left with the company after payment of current liablities, hence more net working capital means company has surplus money for its day to day operations
Working capital is actual CASH money that you are able to use, for the business. It can be liquid cash in a bank account or credit that you can draw on, as needed.