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





  • 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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