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Working capital represents the operating liquidity available to a business organization. Working capital may mean…
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The working capital cycle measures the amount of time that elapses between the moment when the organization…
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Factors affecting working capital requirement:…
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a.) Fixed working capital is that portion of the total capital that is required to be maintained in the business…
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The sources used for financing temporary requirement of working capital are:…
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Spontaneous source of financing variable working arises in the normal course of business operations…
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Following current liabilities can be used as spontaneous source of financing the working capital:…
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Commercial papers are an unsecured promissory note issued at a discount with a fixed maturity of 1-270 days….
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Inter Corporate Deposits indicates unsecured short term funding raised by one company from another company. ….
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Following Credit rating agencies are authorized by RBI to provide a credit rating for Commercial Papers:…
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Following persons can invest in commercial papers:…
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Nature of a commercial paper - It can be issued for the maturity period of 7 days to 1 year….
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Every company issuing the CP should appoint a scheduled bank as the issuing and paying agent….
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Advantages of commercial papers...Disadvantages of commercial papers...
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Working capital assistance is provided by the bank in order to bridge the gap between current assets and current liabilities.....
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A bank can disburse the amount of assistance in any of the following forms:....
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Non fund based lending, where the lending bank does not commit any physical outflow of funds…..
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Bank Guarantee is a non fund based lending given by the bank to ensure that the liabilities of a debtor will be met….
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Letter of Credit is a non fund based lending which is very regularly found in international trade….
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Different types of Letter of Credit: 1) Revocable Letter of Credit 2) Irrevocable Letter of Credit…
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Advantages of Letter of Credit to an Exporter:..
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Advantages of Letter of Credit to an Importer:…
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Fund based lending, where the lending bank commits the physical outflow of funds…
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a.) Loan b.) Over draft c.) Cash credit d.) Bills Purchased/ discounted e.) WC Term loans f.) Packing credit…
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A bank needs following forms of security to provide security to a company:…
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The main issues studied by Tandon committee to exercise control over working capital were:…
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The observation and recommendations made by Tandon committee were:…
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According to the notification of RBI dated on 21st Aug 1975 accepted the following recommendations of Tandon committee:…
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