4. Working capital: It refers to the funds that are
required by a business firm to meet its short
term requirements in the form of operational
expenses.
Gross working capital: It is the capital invested on
the total current assets of a business concern.
Net working capital: It is the excess of current
assets over current liabilities or difference
between CA and CL.
8. Purchase of raw materials
Payments of wages and
salaries
Operational daily
expenses
Provide credit obligations
9. Nature of business
Size of business
Production cycle
Manufacturing process
Earning of firm
Dividend policy
Business cycle
Credit policy
Growth & expansion
Availability of raw materials
12. Buy materials in bulk
Tough in planning
Inefficient usage of fixed
assets
Rate of return on
investments falls
Overall operation of
business decreases
13. Internal
• Retained
earnings
• Reserves &
surplus
• Depreciation
funds
External
• Shares
• Debentures
• Loans from FI
• Financial
arrangements
• Public
deposits
Editor's Notes
Finance function refers to all the activities of a company with respect to financial management.