COMPONENTS AND KINDS OF WORKING CAPITAL WITH IMPORTANCE OF ADEQUATE WORKING CAPITAL

PROF. DHARMENDRA C. PARMAR

Volume : IX, Issue : V, May - 2020

COMPONENTS AND KINDS OF WORKING CAPITAL WITH IMPORTANCE OF ADEQUATE WORKING CAPITAL

Prof. Dharmendra C. Parmar

Abstract :

Working Capital refers to funds required to be invested in the business for a short period usually up to one year. It is also known as short–term capital or circulating capital. Working Capital may be regarded as the lifeblood of a business. Its effective provision can do much to ensure the success of a business. Its inefficient management can lead not only to loss of profit but also to the downfall of a business. A study of Working Capital is of major importance to internal and external analysis because of its close relationship with the current day–to–day operations of a business. Every business needs funds for two purpose. Long term funds are required to create production facilities through purchase of fixed assets, such as, plants, machineries, land, building etc.