Factors Affecting Working Capital Level

May 30th, 2008 Comments off
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Some of the factors that can affect a firm’s working capital level are:

 

 

Type/Nature Of Business

 

  • Working capital level is generally higher in manufacturing based versus service base organizations

 

 

Depends on the Volume of Sales

 

  • The higher the sale, the higher is the level of working capital required

 

 

Seasonality

 

  • Peak seasons like festive seasons require a higher level of working capital

 

 

Length of Operating And Cash Cycle

 

  • A longer operating and cash cycle increases the level of working capital

 

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Financial Accounting

 
 

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