Discuss the concept of Working Capital. As a financial manager which factors would you take into consideration while estimating working capital needs of your firm

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Working capital is a crucial aspect of any business and refers to the funds that a company needs to operate its day-to-day business activities. It is the difference between current assets and current liabilities, which represents the amount of cash or other assets available to a company for running its operations.

As a financial manager, estimating the working capital needs of a firm is an essential aspect of managing the financial health of the business. Several factors need to be considered while estimating working capital needs, including the nature of the industry, the size of the company, the type of products or services offered, and the economic environment in which the business operates.

The following are some of the factors that a financial manager would take into consideration while estimating the working capital needs of a firm:

1. Industry nature: The type of industry that a firm operates in plays a significant role in determining its working capital needs. For example, a manufacturing firm that produces goods in large quantities may require a significant amount of working capital to purchase raw materials, pay labor costs, and maintain inventory levels. In contrast, a service-based company may have lower working capital needs as it does not have _____ __ _____ ____________ _______ _____ _____ ___________.
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Degree : MASTER DEGREE PROGRAMMES
Course Name : Master of Arts (Entrepreneurship)
Course Code : MAER
Subject Name : Finance & Accounting
Subject Code : MER 8
Year : 2023