CBSE 2025 · Region 5 · Set 1 · Q26

‘Omara Ltd.’, is a garments company that produces jackets

from organic, recycled and sustainable materials. The sourcing

of eco-friendly fabrics, slower production process and focus on

ethical labour practices result in big time gap between receipt of

fabrics and their conversion into jackets. Since 'Omara Ltd.'

faces intense competition in the garment industry, it has to hold

large stocks of jackets to meet urgent orders from customers. To

further attract and retain customers, 'Omara Ltd.' offers liberal

credit terms to them. Thus 'Omara Ltd.' is able to perform

much better than its competitors.

(i)

State whether the total working capital requirement of

(i)

'Omara Ltd.' will be high or low.

(ii)

Justify your answer given in (i) above by identifying and

(ii)

stating any three factors affecting working capital requirements

(ii)

discussed in the above case.