Q. Objective of the business?

Working capital is needed for the following purposes

For the purpose of the raw material, components and spares

To pay the Wages and the salary
To incur the day to day expenses and overhead cost such as a fuel power and office expenses
To meet the selling costs as the packing and advertisement
To provide the credit facilities to the customer
To maintain the inventory of raw material, WIP finish goods

Determinant the working capital needs factors determine the working capital needs because

The working capital require needs of a concern depends upon a large number of the business such as nature and size of the business the character of the operation is the length of the production cycle, the rate of the stock turnover and the state of the economy situation. it is not possible to rank them because all such factors are of the different important and influence the individual factors changes over a firm over the timing the following important factors consider.