Factors Affecting Working Capital Level

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


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.