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Subjects

Business Studies

Working capital

This Class 12 Business Studies topic explains working capital as the funds required for a business’s day-to-day operations. As part of Financial Management, students learn how current assets such as cash, inventory and receivables are balanced against current liabilities like payables and short-term obligations. The topic connects working capital with the operating cycle, liquidity and profitability, and helps students understand how factors such as the nature of business, production cycle, credit policy and business growth influence its requirements.

Medium · Level 1 · 3 questions

TOPIC PRACTICE

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3 questions

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  1. Spend on essential needs
  2. Spend all money on decoration
  3. Reduce quality to save cost
  4. Borrow without planning
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  1. Assess the impact on cost and price
  2. Stop production immediately
  3. Stop talking to customers
  4. Double the price without checking
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  1. Because timely payments and daily operations may be affected without it
  2. Because cash flow has no relation to business
  3. Because looking only at sales is enough
  4. Because recording expenses is not needed

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