Working Capital Calculation

May 19th, 2015
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Financing of permanent / fixed or long-term working capital

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Financing ofWorking CapitalSUBMITTED TO:EFFORTS BY:Mr.Vikas Naib &ClassmatesPIYUSH2110077MBA SEM-II BSources of Working CapitalPermanent or Fixed1.SharesTemporary or Variable1.Commercial Bank2.Debentures2.IndigenousBankers3.Public Deposits3.Trade Credit4.Ploughing back of Profits4.Instalment Credit5.Loans from FinancialInstitutions5.Advances6.Accrued Expenses7.Deferred Incomes8.Commercial PaperFinancing of permanent / fixed or long-term working capital1.Shares-Issue of shares is the most importantsource for raising the permanent or long termcapital.A company can issue various types ofshares as equity shares,preference shares,deferredshares.Thesearetheownersofthecompany.Shareholders are paid dividend upon theprofits of the company.As far as possible,acompany should raise the maximum amount ofpermanent capital by the issue of shares.2.Debentures-It is an instrument issued by thecompany acknowledging its debt to its holder.It isalso an important method of raising long termcapital.The debenture-holders are the creditors ofthe company.A fixed rate of interest is paid ondebentures.The interest on debentures is a chargeagainst P&L a/c.The debentures are generallygiven floating charge on the assets of thecompany.3.Public Deposits-Public Deposits are the fixeddeposits accepted by a business enterprise directlyfrom the public.This source of raising short-term andmedium-term finance was very popular in th

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