MANAGEMENT

Detailed explanation-1: -The minimum amount of current assets which is required to conduct the business smoothly during the year is called permanent working capital. For example, investments required to maintain the minimum stock of raw materials or to cash balance.

Detailed explanation-2: -Simply put, the working capital requirement is nothing but the difference between a company’s current assets and current liabilities. In other words, it is the amount that is required to keep the business operations running smoothly.

Detailed explanation-3: -Working capital management is a business strategy designed to ensure that a company operates efficiently by monitoring and using its current assets and liabilities to their most effective use.

Detailed explanation-4: -Regular Working Capital Regular working capital is the least amount of capital required by a business to carry out its day-to-day business operations. For example, making a monthly payment of salaries and wages and overhead expenses for processing raw materials required for the business.

Detailed explanation-5: -Permanent working capital refers to the minimum amount of working capital i.e. the amount of current assets over current liabilities which is needed to conduct a business even during the dullest period.