Working capital example sentences

The funds are required for purchasing fixed assets (fixed capital requirement), for running day-to-day operations (working capital requirement), and for undertaking growth and expansion plans in a business organisation.A business unit selling goods on credit, or having a slow sales turnover, for example, would require more working capital as compared to a concern selling its goods and services on cash basis or having a speedier turnover.For instance, small loans are provided to the members for releasing mortgaged land, for meeting working capital needs (e.g. buying seeds, fertilisers, raw materials like bamboo and cloth), for housing materials, for acquiring assets like sewing machine, handlooms, cattle, etc.In this case, Salim obtains credit to meet the working capital needs of production.As a result, the requirement for working capital is reduced.The requirement for fixed and working capital increases with the growth and expansion of business.Other important adjustments relate to changes in working capital which are necessary (i.e. items of current assets and current liabilities) to convert net profit/loss which is based on accrual basis into cash flows from operating activities.The turnover ratios basically exhibit the activity levels characterised by the capacity of the business to make more sales or turnover and include Stock Turnover, Debtors (Receivable) Turnover, Creditors (Payable) Turnover, Working Capital Turnover, Fixed Assets Turnover, and Current asset Turnover.He also used the savings to arrange for the working capital for farming in the next season.Raw materials and money in hand are called working capital.She estimates that the working capital itself would cost a minimum of Rs 3,000.High turnover, capital employed, working capital and fixed assets is a good sign and implies efficient utilisation of resources.This is known as working capital of an enterprise, which is used for holding current assets such as stock of material, bills receivables and for meeting current expenses like salaries, wages, taxes, and rent.This enables the retailers to manage their business with relatively small amount of working capital.The amount of working capital required varies from one business concern to another depending on various factors.