Blogger Random - Recent - Specific Label Posts Widget - All in One Post Feed Widget

Sources for Financing the Working Capital

>> December 19, 2008

There are two type of sources for financing the working capital requirement .

a) Permanent / long term sources

(i) Shares Capital

In shares we includes
a) equity shares

b) Pref. Share capital

(ii) Debenture

(iii) Public deposits

(iv) Ploughing back of profit.

Here I am giving little explanation of ploughing back of profit . It means save some profit from business and when need of working capital it uses this is called ploughing back of profit this is good long term source of working capital.

(V) Loan from financial institution

b) Temporary / Short term sources

(i) Indigenous bankers are the short term source for financing the working capital .
(ii) Trade credits
Trade credit means getting of goods on credit . This is also a short term source of working capital.
(iii) Instalment credit
( iv) Income received in advance

(v) Advances received from customers
(vi) Bank loan include cash credit and overdraft
( vii) commercial papers
(viii) Purchasing and discounting of bills
( ix) Letter of credit

You might like:

Follow Us


Post a Comment

About Accounting Education

An educational site with 2500+ articles, solutions, video-guides and tutorials on all topics related to accounting and finance.

Get Update on Mobile

Type in your mobile phone web browser for free access anytime, from any place.The content is designed specifically for cell phones and mobile devices.

Contact Us

Email :

Phone : +91-8557888436

Send an Email
Phone number and vCard
LinkedIn profile
Follow us on twitter