Question

A Business who wants to start a manufacturing concern, approaches you to suggest him whether the following manufacturing concern would required large or small working capital:
(a) Bread (b) Coolers (c) Sugar (d) Motor car (e) Furniture manufactured against specific orders
(f) Locomotives

Answer 1

(a) Bread: Requirement of working capital will be less because it has quick cash turnover.
(b) Coolers. Requirement of working capital is more because it is a seasonal product.
(c) Sugar: Working Capital required will be moe because operating cycle is long.
(d) Motor car. Working capital required will be more because of long operating cycle
(e) Furniture: Requirement of working capital will be less because no inventory has to be maintained
(f) Locomotives: Requirement of working capital will be less because of small operating cycle.