Commerce Exam > Commerce Questions > A businessman is engaged buying and selling o...
Start Learning for Free
A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer?
Most Upvoted Answer
A businessman is engaged buying and selling of ice cream and desert on...
Working Capital Requirements of a Businessman Engaged in Buying and Selling Ice Cream and Dessert
Introduction
Working capital refers to the amount of funds required by a business to cover its day-to-day operational expenses. In the case of a businessman engaged in buying and selling ice cream and dessert, there are several working capital requirements that need to be considered.
1. Inventory Management
One of the key working capital requirements for this business is managing inventory. Ice cream and dessert are perishable items, and it is crucial to maintain an adequate stock to meet customer demand. This requires investing in inventory to ensure a continuous supply of products without running out of stock.
2. Cash Flow Management
Effective cash flow management is essential for a businessman engaged in buying and selling ice cream and dessert. The business needs to have sufficient cash on hand to cover daily expenses such as purchasing ingredients, paying rent, utility bills, and wages. This requires careful monitoring of cash inflows and outflows, and maintaining an appropriate cash reserve to meet these obligations.
3. Marketing and Promotion
To attract customers and increase sales, marketing and promotional activities are necessary. This includes advertising, social media campaigns, creating attractive displays, and offering discounts or promotions. Allocating a portion of the working capital towards marketing and promotion is crucial to create brand awareness and attract potential customers.
4. Equipment and Machinery
Investing in efficient equipment and machinery is important for the smooth operation of the business. This includes ice cream machines, refrigerators, display freezers, and other necessary equipment. Setting aside a portion of the working capital for the maintenance, repair, and purchase of equipment is essential to ensure uninterrupted production and sales.
5. Working Capital Cycle
The working capital cycle in this business involves the time it takes to convert inventory into sales and then receive payment from customers. As ice cream and dessert are perishable items, it is important to minimize the time between production and sale to avoid spoilage. Therefore, proper management of the working capital cycle is crucial to ensure a steady cash flow and meet financial obligations.
Conclusion
In conclusion, a businessman engaged in buying and selling ice cream and dessert has several working capital requirements. These include managing inventory, maintaining cash flow, investing in marketing and promotion, purchasing and maintaining equipment, and effectively managing the working capital cycle. Proper attention to these requirements is essential for the successful operation and growth of the business.
Introduction
Working capital refers to the amount of funds required by a business to cover its day-to-day operational expenses. In the case of a businessman engaged in buying and selling ice cream and dessert, there are several working capital requirements that need to be considered.
1. Inventory Management
One of the key working capital requirements for this business is managing inventory. Ice cream and dessert are perishable items, and it is crucial to maintain an adequate stock to meet customer demand. This requires investing in inventory to ensure a continuous supply of products without running out of stock.
2. Cash Flow Management
Effective cash flow management is essential for a businessman engaged in buying and selling ice cream and dessert. The business needs to have sufficient cash on hand to cover daily expenses such as purchasing ingredients, paying rent, utility bills, and wages. This requires careful monitoring of cash inflows and outflows, and maintaining an appropriate cash reserve to meet these obligations.
3. Marketing and Promotion
To attract customers and increase sales, marketing and promotional activities are necessary. This includes advertising, social media campaigns, creating attractive displays, and offering discounts or promotions. Allocating a portion of the working capital towards marketing and promotion is crucial to create brand awareness and attract potential customers.
4. Equipment and Machinery
Investing in efficient equipment and machinery is important for the smooth operation of the business. This includes ice cream machines, refrigerators, display freezers, and other necessary equipment. Setting aside a portion of the working capital for the maintenance, repair, and purchase of equipment is essential to ensure uninterrupted production and sales.
5. Working Capital Cycle
The working capital cycle in this business involves the time it takes to convert inventory into sales and then receive payment from customers. As ice cream and dessert are perishable items, it is important to minimize the time between production and sale to avoid spoilage. Therefore, proper management of the working capital cycle is crucial to ensure a steady cash flow and meet financial obligations.
Conclusion
In conclusion, a businessman engaged in buying and selling ice cream and dessert has several working capital requirements. These include managing inventory, maintaining cash flow, investing in marketing and promotion, purchasing and maintaining equipment, and effectively managing the working capital cycle. Proper attention to these requirements is essential for the successful operation and growth of the business.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Top Courses for CommerceView all
A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer?
Question Description
A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer?.
A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer?.
Solutions for A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? defined & explained in the simplest way possible. Besides giving the explanation of
A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer?, a detailed solution for A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? has been provided alongside types of A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? theory, EduRev gives you an
ample number of questions to practice A businessman is engaged buying and selling of ice cream and desert on the regular basis identify the working capital requirements of Aran give reason of support of you r answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup