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Explain the difference between fixed capital and working capital requirements in a business.
Explain the difference between fixed capital and working capital requirements in a business.
Fixed capital is the funds needed for the purchase of fixed assets, while working capital is the requirement for day-to-day operations.
What are the factors that lead to an increase in working capital requirement in a business?
What are the factors that lead to an increase in working capital requirement in a business?
Factors that lead to an increase in working capital requirement include peak season, festival season, expansion of business, shifting to a new location, and payment of current debt.
List three examples of long-term sources of finance that can be used to finance fixed capital requirements.
List three examples of long-term sources of finance that can be used to finance fixed capital requirements.
Examples of long-term sources of finance include issue of shares, issue of debentures, and lease financing.
Explain the concept of retained earnings as a source of finance for a business.
Explain the concept of retained earnings as a source of finance for a business.
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What are the sources of finance that can be used to meet working capital requirements through short-term finance?
What are the sources of finance that can be used to meet working capital requirements through short-term finance?
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