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reliance company in warking capital policy
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What are the basic financial decision in an organization?
The basic financial decisions include long term investment decisions, financing decisions and dividend decisions. Investment Decision relates to the selection of assets in which funds will be invested by a firm. These decisions are of two types Capital Budgeting Decisions and Working Capital Decisions. Financing Decision is broadly concerned with the asset-mix or the composition of the assets of a firm. The concern of the financing decision is with the financing-mix or capital structure or leverage. Dividend Policy Decision isrelated to the dividend policy.
Main features of Indian licensing policy?
ANS: Industrial Licensing is governed by the Industries (Development & Regulation) Act, 1951. The Industrial Policy Resolution of 1956 identified the following three categories of industries: those that would be reserved for development in public sector, those that would be permitted for development through private enterprise with or without State participation, and those in which investment initiatives would ordinarily emanate from private entrepreneurs. Over the years, keeping in view the changing industrial scene in the country, the policy has undergone modifications. Industrial licensing policy and procedures have also been liberalised from time to time. All industrial undertakings are exempt from obtaining an industrial licence to manufacture, except for (i) industries reserved for the Public Sector, (ii) industries retained under compulsory licensing, (iii) items of manufacture reserved for the small scale sector and (iv) if the proposal attracts locational restriction.
What is the effect of credit policy on performance profitability and liquidity?
The credit policy generally demands payment. Working class professionals will generate more money in order to sort out credit requirements.
What does RBC stand for in RBC banking?
In banking terms, the abbreviation RBC stands for Risk Based Capital. The term is used to describe a policy that has both a chance to lose a part of the investment and a chance to substantially increase the initial capital.
Are taxes due on money received from a life insurance policy?
In most instances, no income tax is due on life insurance proceeds. (A rare exception would be if the policy was sold, making it a capital asset. Very rare, though.) There is no estate tax on the insurance policy, per se. However, if the value of the decedent's estate, including the proceeds of the policy, exceeds a certain amount ($2 million this year), then the estate would be liable to pay an estate tax. The proceeds of the policy would not be included in the value of the estate if the decedent had no incidents of ownership in the policy at death. An example would be a policy that was owned by an irrevocable trust and the decedent did not own the policy within 3 years of death.
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.
Shortfalls of the industrial policy pursued by British colonial administration?
The following were some of the shortfalls of the industrial policy pursued by the British colonial administration: 1) The decline of the indigenous handicraft industries. 2) Slow progress of modern industries. 3) Absence of capital goods industries. 4) The contribution of the industrial sector to the G.D.P. remained very small.
What are the 3 decisions involved in accounting function?
Following are three decisons involved: 1 - Working capital management 2 - Capital Structure decsion 3 - Dividend policy
What happen to my Reliance Standard Life Insurance Company Policy number769346A?
I signed up for life indurance in September and have not gotten my policy. How long does it take to receive a policy ?
What is the working capital structure of reliance industries limited?
A mix of a company's long-term debt, specific short-term debt, common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds. there are three structures followed by the companies 1.Maturity matching policy - Current liabilities only can finance by the amount of temporary current assets. low risk 2. Aggressive policy - Current liabilities can finance by the amount of temporary current assets and permanent current assets. too risky 3. Conservative approach - Current liabilities only can finance by the a part of amount of temporary current assets. it means temporary current assets> current liabilities. the more safest mode to financing. - AzR 13 -
What has the author Yojana written?
Yojana. has written: 'The meaning of self-reliance' -- subject(s): Economic policy
What has the author Lihong Guo written?
Lihong Guo has written: 'Gao xin ji shu chan ye' -- subject(s): High technology industries, Technological innovations, Government policy, Venture capital
What is education for self-reliance And what are the components of education for self-reliance?
It was a policy within the framework of Ujamaa and self-reliance, which was launched by Mwalimu Julius Nyerere in 1967. ESR criticized the colonial education system and proposed an alternative model to cater to the needs the Tanzanian community.
What is working capital and what factors affect the size of working capital in an enterprise?
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.
Disadvantages of industrial policy?
The disadvantages of industrial policy are that it creates industries that are inefficient and causes unemployment increases internationally.
What is the definition of coercive federalism?
The federal government gives states list of things to do by limiting the money given to them. Coercive federalism, in which the federal government reduced its reliance on fiscal tools to stimulate inter-governmental policy cooperation and increased its reliance on regulatory tools to ensure the supremacy of federal policy.
How would you assess the working capital requirements of a seasonal industry?
In the seasonal industries the level of working capital requirement will not be similar all through the year. In times of off season, the working capital requirement and the levels of investment in current assets and liabilities are very low. But during season, the firm's requirement of working capital is at peak level. For example, the sugar industry, the crushing season in a year will remain for 5 to 6 months time. During the season the plant is expected to work at full capacity with triple shift working and the requirement of stocks of raw martial is very high and resultant increase in stocks of sugar. The requirement for payment of labor, expenses, maintenance, finished stock inventory are higher. In off season, the plant will be closed and upkeep and maintenance of plant will be incurred and the level of current assets and current liabilities comes down and the working capital requirement would be very low. For this they have to take the following precautions:1) Preparation of projected cash flow statement showing of cash flows for peak season, normal season and off season requirement.2) Make proper arrangement with the banks and other sources of finance to meet the short term need of season.3) Make proper arrangement for meeting the contingencies of higher level requirement than the projected level of requirement.4) Proper and careful assessment of working capital requirement for the season and off season requirement.Factor Affecting the Working Capital Requirements of the Firm1) Nature or Character of Business: The amount of working capital is basically related to the nature and volume of the business. In concerns where the cost of raw materials to be used in the manufacture of a product is very large in proportion to its total cost of manufacture, the requirements of working capital will be large. On the contrary, concerns having large investments in fixed assets require lesser amount of working capital.2) Size of Business/Scale of Operations: The working capital requirements of a concern are directly influenced by the size of its business which may be measured in terms of scale of operations. Greater the size of a business unit, generally larger will be the requirements of working capital.3) Production Policy: A firm marked by pronounced seasonal fluctuation in its sale may pursue a production policy which may reduce the sharp variations in working capital requirements. For example a manufacturer of air conditioners may maintain steady production through out the year rather than intensify the production activity during the peak business season. Such decision may dampen the fluctuations in working capital requirements.4) Manufacturing Process/Length of Production Cycle: In manufacturing business, the requirements of working capital increase in direct proportion to length of manufacturing process. Longer the process period of manufacturing, larger is the amount of working capital required.5) Supply Variations: In seasonal industries raw material is not available throughout the year. They have to buy raw materials in bulk during the season to ensure an uninterrupted flow and process then during the entire year.6) Availability of Credit: If the firm gets credit on liberal terms it will require less WC since it can always pay its creditors later and vice-versa.7) Inventory: In business like sugar industry, one needs to store a large amount of raw material and finished goods because of its seasonality. Businesses are not able to sale whole finished product, so more working capital is required.8) Working Capital Cycle: In a manufacturing concern, the working capital cycle starts with the purchase of raw material and ends with the realization of cash from the sale of finished products. The speed with which the working capital completes one cycle determines the requirement of working capital i.e., longer the period of the cycle larger is the requirement of working capital.9) Rate of Stock Turnover: There is a high degree of inverse co-relationship between the quantum of working capital and the velocity or speed with which the sales are affected. A firm having a high rate of stock turnover will need lower amount of working capital as compared to a firm having a low rate of turnover.10) Credit Policy: The credit policy of a concern in its dealings with debtors and creditors influence considerably the requirements of working capital. A concern that purchases its requirements on credit and sells its products/services on cash requires lesser amount of working capital.11) Rate of Growth of Business: The working capital requirements of a concern increase with the growth and expansion of its business activities.
