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Business Studies · 2024 · 4 marks
CBSE 2024 · Region 4 · Set 2 · Q28
Explain the following factors affecting the working capital requirements of a company: (a) Production cycle (b) Seasonal factors
Explain the following factors affecting the working capital requirements of
a company :
(a)
Production cycle
(b)
Seasonal factors
Marking-scheme solution
(a)
Production Cycle:
Production cycle is the time span between the receipt of raw
material and their conversion into finished goods.
Working capital requirement is higher in firms with longer
processing cycle and lower in firms with shorter processing
cycle.
(b)
Seasonal factors:
In peak season, because of higher level of activity, larger amount
of working capital is required.
As against this, the level of activity as well as the requirement for
working capital will be lower during the lean season.
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CBSE Class 12 Business Studies past-paper question from the 2024 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.