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CBSE Class 12-commerce Answered

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Asked by Babita | 21 Mar, 2019, 02:51: PM
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According to the facts mentioned in the above question following are the factors that affect the working capital and result in high or low working capital requirement:

Credit allowed: Credit policy refers to the average period for collection of sale proceeds. This depends on credit worthiness of clients. So, a company which allows liberal credit policy will require more working capital. In the above question, the company follows a liberal policy. Hence, it will have a high working capital requirement.

Nature of business: The nature of business is one of the important determinants of working capital requirement. For, instance, an organisation dealing in manufacturing would require large working capital. This is because it requires the organisation to convert raw materials into finished goods, provide goods on credit, maintain inventory etc. In the above case, Steelone is a manufacturing organisation, hence, it has a high working capital requirement.

From the facts of the above case, it is also implied that Steelone will have a long operating cycle as it follows a liberal credit policy due to which the working capital requirement will also be high. Hence, length of operating cycle is also one of the factors affecting the working capital requirement.

Answered by charmi | 22 Mar, 2019, 12:42: PM
CBSE 12-commerce - Business Studies
Asked by senthilramanathankanishka | 16 May, 2022, 09:39: PM
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CBSE 12-commerce - Business Studies
Asked by nsharmayoo | 02 Oct, 2021, 11:20: AM
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CBSE 12-commerce - Business Studies
Asked by nousadsalmani169 | 27 Sep, 2020, 02:24: PM
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CBSE 12-commerce - Business Studies
Asked by rsnitish7051singh | 20 May, 2020, 01:07: PM
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CBSE 12-commerce - Business Studies
Asked by singhsukh3355 | 18 May, 2020, 10:09: AM
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CBSE 12-commerce - Business Studies
“Coconut Joy Ltd.” are the manufacturer of vegetarian frozen dessert food products made with coconut milk, agave syrup and other certified ingredients. The founders of the company Lovely and Lalita originally developed this treat to meet their own needs but found that their friends and families around were also keen to use the products. It was not only the vegetarians, but also those who could not get enough environment friendly sustainable food, that appreciated the product. It did not take long for Lovely and Lalita to recognise the potential of their little venture. In the beginning they started from their home with the product being sold through local family parties that enable guests to personally meet the owner. This helped to establish strong connections with the prospective buyers and the company could put the product on shelves of natural food store. The company used* all marketing activities to grow and expand. The company began sponsoring booths at festivals, drawing attention to its newly created vegetarian products. It also disseminated relevant information to media about its products and the people who helped in building the company’s reputation. Lovely and Lalita were invited for an interview with one of the leading TV channels in which they talked about their environment friendly vegetarian products. To show its gratitude to customers, local business and government officials who supported the company from the beginning, “Coconut Joy Ltd.” hosted a gala event and involved all of them to raise funds for a few local NGO’s. The company also asked its fans and customers to send songs and poetry conveying their impression about “Coconut ‘Joy’s Ltd.” products. Identify and explain the communication tool used by “Coconut Joy Ltd”. . Briefly explain the role of the tool identified in (1) above.
Asked by purnayyap | 22 Apr, 2020, 11:12: AM
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CBSE 12-commerce - Business Studies
Asked by Prashant DIGHE | 18 Apr, 2020, 10:24: PM
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CBSE 12-commerce - Business Studies
Asked by vcgeetha22 | 21 Mar, 2020, 01:54: PM
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