Types of Working Capital. Determinants of Working Capital Number of factors has an influence on the size and need of working capital in an organisation. Determinants of working capital 1. The following are five determinants of working capital requirement: (i) Type of Business: Working capital requirement of a firm depends on its nature of business. Temporary Working Capital – Seasonal or special requirements for funds. In any business, managing working capital is a never-ending task for the finance and accounting personnel. An organisation that deals in services or trading will not require much of working capital. understand the role and determinants of working capital. However, the effects of the determinants of working capital management differ depending on enterprise size and enterprise age. 7. Working Capital Cycle determines working capital requirement. Working capital cycle refers to the time required to convert the raw materials into finished goods and up to the stage of conversion of finished goods into cash form. Working capital requirement of a firm is directly influenced by the size of its business operation. The relationship between current assets and current liability items is called working capital of the organization. DETERMINANTS OF WORKING CAPITAL. Big business organizations require more working capital than the small business organization. The total working capital requirement is determined. If the working capital cycle is long, there is a need of more amount of working capital and vice versa. Nature Of Business 8. In this article, the author investigates the determinants of working capital requirements of 66 firms in Nigeria using panel data for the period 1997–2007. So no definite rule or formula can be prescribed for calculating the amount of working capital. DETERMINANTS OF WORKING CAPITAL • PRESENTED BY- SADIQUE ALI ENROLLMENT NO-A165386 • SUBMITTED TO- Dr. Syed Khaja Safiuddin ASSISTANT PROFESSOR 2. Semi-variable Working Capital – The fund requirements remains same up to a stage, then increases with sales and time. A constant inflow of funds has to be ensured to keep the daily operations of the company motoring along smoothly. Permanent Working Capital – Funds necessary to carry the operations of a business. WORKING CAPITAL The capital which is needed for the regular operation of business is called working capital. so utmost care should be taken to shorten the period of cycle in order to minimize the working capital requirements. by a wide variety of factors.. These factors, however, affect different enterprises differently.They also vary from time to time. 2. Therefore, the size of organization is one of the major determinants of working capital. 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