aliya bhat
asked over 2 years ago
Hi Can you please Explain the role of ‘Operational efficiency’ in the determination of working capital requirement?
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2 Answers
Pankaj
answered over 2 years ago
Hello The firm with a better operational efficiency has to invest less in working capital because they convert raw materials quickly into finished goods, and sell them at their earliest. i.e. a) converts stock into sales quickly. b) Promptly collects debts from debtors and bills receivable
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Chirag
answered over 2 years ago
The firm with a better operational efficiency has to invest less in working capital because they convert raw materials quickly into finished goods, and sell them at their earliest. i.e. a) converts stock into sales quickly. b) Promptly collects debts from debtors and bills receivable
