importance of working capital?long term & short term finance for working capital?

Question

what are the ways in which bank provides assistance for working capital? fund based and non fund based activities?

Answer 1

working capital requirements depend on what industry you are in. For manufacturing, your need for more working capital is higher because you would like to stock up on inventories to be able to sell more and eliminate stock outs.

Working capital helps you in your current and long term sales since it dictates your capacity to do business. The higher the working capital, the more you can invest in manufacturing goods to be sold. Obviously, if you don't have any goods manufactured, then you cannot sell anything.

You plow back money in the business so that you can manufacture more goods to be able to sell. It is a virtuous cycle of manufacturing and selling the goods.

In service industries, working capital is not required to be as high as manufacturing suits.

Answer 2

Try the articles in

http://www.hot8sites.com/finance/