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Sources of working capital Following are various sources of working capital or short-term finance:Image credits © Prof. Mudit Katyani.Public Deposits is a significant source of working capital. It is an unsecured loan. It is taken by the company from the depositor for a short period. The maximum duration is three years. It has a high rate of interest. It is very popular in India. All types of

Factors affecting working capital requirements 14 factors affecting working capital requirements of a business:Image credits © Prof. Mudit Katyani.Nature of business, Size of business, Time and complexities of manufacturing process, Manufacturing cost, Growth and Expansion, Terms of purchase and sales, Conditions of supply, Market conditions, Business cycle, Operating cycle, Rate of Turnover,

Importance of working capital Every company needs working capital to meet its short-term expenses. It keeps the business moving. Without it, the business will stop, and the company will become sick.Explained below is the importance of working capital.Image credits © Prof. Mudit Katyani.Continuity in Business Operations: Working capital keeps the business operations moving. It is needed to

Advantages of Debit Card The following points discuss important benefits or advantages of debit card.ADVANTAGES OF DEBIT CARDPrepaid cardDebit card acts as a type of prepaid card. It is so, since it already has a sufficient amount of cash balance in its holder’s bank account. It permits to carry on the value of the transaction (i.e. purchases) to the extent of available balance in its holder’s

What is Debit Card? Definition Debit card can be defined either in a simple way or detailed manner depending on how it is perceived with respect to different senses of finance. Following statements are few selected ones that lucidly express the definition of debit card within their individual perspectives. These definitions of debit card will help to get its overall understanding.1. In a General

Factors Influencing or Affecting Fixed Capital Requirement Following diagram highlights the important factors influencing or affecting fixed capital requirement of a business. Click on image for a zoomed preview.The factors determining, affecting or influencing fixed capital requirements of a business are briefly given in the following nine points:Nature of business is the most crucial factor of

Explain Role or Importance of Fixed Capital Following diagram briefly explain the main role or importance of fixed capital.The main role or importance of fixed capital is listed in following eight points:Fixed capital is required to buy fixed assets for the company. It is needed to meet various promotionl expenses of a company. It aids a company to modernise by easing the process of purchasing

Sources of Fixed Capital or Long Term Finance The main sources of fixed capital or long term finance are depicted below.The sources of fixed capital or long term finance are:Issue of Equity and Preference shares. Issue of Right shares. Private placement of shares. Issue of debentures. Term loans. Retained earnings. Lease financing. Now let's briefly discuss each source of fixed capital or long

Explain the Features of Turnaround Strategy Following image briefly explains important features of turnaround strategy.Nine important characteristics or features of turnaround strategy are:Turnaround involves restructuring the sick company. It is applicable to a loss-making unit. It needs consultation of internal and external experts. It is a long and time-consuming process. It involves in-depth

Meaning of Turnaround Strategy Following diagram depicts the core meaning of turnaround strategy.The concept or meaning of turnaround strategy covers following points:Turnaround strategy means to convert, change or transform a loss-making company into a profit-making company. It means to make the company profitable again. The main purpose of implementing a turnaround strategy is to turn the

What are the Advantages of Mergers? The nine major advantages of mergers are depicted below.The major benefits or advantages of mergers are as follows:Economies of scale. Tax benefits. Financial resources. Entry in global markets. Growth and expansion. Helps to face competition. Increase in market share. Increases goodwill. Research and development (R&D). Miscellaneous advantages. Now let's

What are the Advantages of Amalgamation? The ten principal advantages of amalgamation are depicted below.The main benefits or advantages of amalgamation are as follows:Operating economics. Diversification. Financial economics. Growth. Managerial effectiveness. Helps to face competition. Revival of sick units. Tax advantages. Increase in market share. Increases goodwill. Miscellaneous advantages.

Priority Sector Lending Meaning Priority sector plays an important role in the economic development of the country. Therefore, the Central (Federal) Government of any country gives this sector priority (first preference) in obtaining loans from banks at a low rate of interest. This is known as a ‘Priority Sector Lending’.Following important points cover the core meaning of priority sector

What are Types of Foreign Collaboration? The four main types of foreign collaboration are depicted below.The classification or types of foreign collaboration include namely:Financial collaboration. Technical collaboration. Marketing collaboration. Management consultancy collaboration. Now let's proceed further to discuss each type of foreign collaboration. 1. Financial collaboration In case of

What are Features of Foreign Collaboration? The nine important features of foreign collaboration are depicted below.The main characteristics or features of foreign collaboration are as follows:A type of partnership. Requires an approval of the government. Entities are from developed and developing country. Benefits to developed country. Benefits to developing country. Establishes business

Definition of Foreign Collaboration In general, the definition of foreign collaboration can be stated as follows.“Foreign collaboration is an alliance incorporated to carry on the agreed task collectively with the participation (role) of resident and non-resident entities.”Alliance is a union or association formed for mutual benefit of parties.Foreign collaboration is such an alliance of

What are Features of Fixed Capital? The ten important features of fixed capital are depicted in the following image.The main characteristics or features of fixed capital are listed as follows:Purchase of fixed assets. Promotion and expansion of business. Low liquidity. Permanent in nature. Primary sources. Amount of fixed capital. Long-term needs of business. Source of wealth and risk. Source of

Definition of Fixed Capital In general, the definition of fixed capital can be stated as under.“Fixed capital is a compulsory initial investment made by the entrepreneur to start up the activities of his business.”Fixed capital is a mandatory one-time investment made at the introductory phase of a business establishment.Fixed capital is not alike working capital, which is required on a

Definition of Amalgamation In general, the definition of amalgamation can be stated as follows."Amalgamation is a union of two or more companies, made with an intention to form a new company."In terms of finance, the definition of amalgamation can be given as under."Amalgamation is an agreement (deal) between two or more companies to consolidate (strengthen) their business activities by

Definition of Merger The definition of merger in general and in finance can be stated as follows:In General,"Merger is an absorption of one or more companies by a single existing company."In Finance,"Merger is an act or process of purchasing equity shares (ownership shares) of one or more companies by a single existing company."Image credits © Arrow International. Meaning of Merger Before we