State why the working capital needs for a 'Service industry' are different from that of a Manufacturing industry.

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Solution

Nature of Business:
The type of business, firm is involved in, is the next consideration while deciding the working capital. In case of trading concern or retail shop the requirement of working capital is less because length of operating cycle is small.
Likewise, the service industry requires less working capital as there is not much requirement of working capital unike manufacturing industry.

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