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Business Studies · 2024 · 4 marks
CBSE 2024 · Region 4 · Set 1 · Q28
Explain the following factors affecting the working capital requirementsof a company :(a)Level of competition(b)Inflation
Explain the following factors affecting the working capital requirements
of a company :
(a)
Level of competition
(b)
Inflation
Marking-scheme solution
(i)
Level of Competition:
Higher level of competitiveness may necessitate higher stocks of
finished goods to meet urgent orders from customers increasing
the working capital requirement.
Competition may also force the firm to extend liberal credit
terms.
(ii)
Inflation:
With rising prices, higher amounts are required even to maintain
a constant volume of production and sales.
The working capital requirement of a business thus, become
higher with higher rate of inflation
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CBSE Class 12 Business Studies past-paper question from the 2024board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.