Some of the factors that can affect a firm’s working capital level are:
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Type/Nature Of Business
- Working capital level is generally higher in manufacturing based versus service base organizations
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Depends on the Volume of Sales
- The higher the sale, the higher is the level of working capital required
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Seasonality
- Peak seasons like festive seasons require a higher level of working capital
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Length of Operating And Cash Cycle
- A longer operating and cash cycle increases the level of working capital
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