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132 Corporate Finance BRILLIANT’S

9. Inflation: The monetary and fiscal 9. BÝâcoeZ… [aOd© ~¢H$ H$s _m°ZoQ>ar Am¡a {\$ñH$c
policy of RBI have direct impact on the level of nm°{cgr H$m BÝâcoeZ Ho$ ñVa na grYm à^md n‹S>Vm h¡&
inflation. If the economy is growing, inflation `{X AW©ì`dñWm H$m {dñVma hmoVm h¡ Vmo BÝâcoeZ H$s
is quite possible. As a result of growing
inflation, the prices of raw material, labour g§^mdZm ahVr h¡& BÝâcoeZ _| d¥{Õ Ho$ H$maU am° _Q>o[a`b,
and overheads increase. It requires higher bo~a VWm AmodahoS²>g ~‹T> OmVo h¢& Bggo BÝdoÝQ>arO Am¡a
investment in inventories and manufacturing {Z_m©U à{H«$`m _| A{YH$ BÝdoñQ>_|Q> H$s Amdí`H$Vm hmoVr
process and so the need for working capital h¡ Am¡a Bg àH$ma d{Hª$J H¡${nQ>c H$s Amdí`H$Vm ~‹T>
also increases. The rising inflation also affects OmVr h¡& BÝâcoeZ _o d¥{Õ \$ÊS> H$s {S>_m§S> Am¡a gßcm`
the demand and supply of the fund. All these
factors affect the requirement of working H$mo ^r à^m{dV H$aVr h¡& `o g^r H$maH$ {~OZog \$_© H$s
capital of the business concern. d{Hª$J H¡${nQ>c H$s Amdí`H$Vm H$mo à^m{dV H$aVo h¢&
10. Market conditions: Working capital 10. ~mOma H$s n[apñW{V`m±… d{Hª$J H¡${nQ>c H$s
requirements are also affected by market Amdí`H$Vm, à{VñnYm© Ho$ ñVa O¡gr ~mOma n[apñW{V`m|
conditions like degree of competition. When
go ^r à^m{dV hmoVr h¢& O~ à{VñnYm© H$‹S>r hmoVr h¡ Vmo
the competition is tough, huge inventory is to A{YH$ BÝdoÝQ>ar aIZm Amdí`H$ hmoVm h¡ Am¡a CXma eVm]
be maintained and credit has to be extended
on liberal terms which need more working na H«o${S>Q> XoZm n‹S>Vm h¡ {Og_| A{YH$ H¡${nQ>c H$s
capital. Amdí`H$Vm hmoVr h¡&
11. Abnormal factors: Abnormal factors 11. Agm_mÝ` H$maH$… h‹S>Vmb Am¡a Vmbm~§Xr O¡gr
like strikes and lockouts require additional Agm_mÝ` H$maH$m| Ho$ H$maU A{V[aº$ d{Hª$J H¡${nQ>c H$s
working capital. If the economic conditions are
Amdí`H$ n‹S>Vr h¡& `{X Am{W©H$ n[apñW{V`m± BÝâcoeZ
inflationary, more funds for working capital
would be required to maintain the same level dmbr hm| Vmo dV©_mZ AgoQ²>g H$s Cgr _mÌm H$mo ~ZmE aIZo
of current assets. Ho$ {bE A{YH$ d{Hª$J H¡${nQ>c H$s Amdí`H$Vm hmoJr&
Following are some other factors which d{Hª$J H¡${nQ>c H$mo à^m{dV H$aZo dmbo Hw$N> H$maH$
influence the working capital: Bg àH$ma h¢…
(a) Cash requirements (a) H¡$e H$s Amdí`H$VmE±
(b) Manufacturing time (b) _¡Ý`y\o$ŠM[a¨J Q>mB_
(c) Terms of purchase and sales (c) nM}g Ed§ goëg H$s eV]
(d) Inventory turnover (d) BÝdoÝQ>ar Q>Z©Amoda
(e) Business turnover (e) {~OZog Q>Z©Amoda
(f) Business cycle (f) {~OZog gm`H$c
(g) Current assets requirements (g) H$aÝQ> AgoQ²>g H$s Amdí`H$VmE±
(h) Profit planning and control (h) àm°{\$Q> H$s ßcmqZJ Am¡a H§$Q´>moc
(i) Repayment ability (i) nwZ^w©JVmZ H$s j_Vm
(j) Cash reserves (j) H¡$e [aOìg©
(k) Firm’s finance and dividend policy (k) \$_© H$s \$m`ZoÝg Am¡a {S>{dS>oÝS> nm°{cgr
(l) Attitude towards risk (l) [añH$ Ho$ à{V Ñ{ï>H$moU
(m) Rate of growth of business (m) {~OZog H$s d¥{Õ H$s Xa
(n) Seasonal variations, etc. (n) grOZb do[aEeZ Am{X& 