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Explain the role of ‘Operational efficiency’ in the determination of working capital requirement?

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Explain the role of ‘Operational efficiency’ in the determination of working capital requirement?
posted Jun 20, 2017 by Divya Shree

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1 Answer

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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

answer Jun 21, 2017 by Niharika Singh
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