Ramnath is into the business of assembli | Class 12 Business Studies Chapter Financial Management, Financial Management NCERT Solutions

Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter Financial Management. This page offers a step-by-step solution to the specific question from Exercise 1, Question 5: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.

Question 5:

Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer.

Answer:

Working capital means the capital invested in current or working assets such as stock of materials and finished goods, accounts receivable, bills receivable, short-term securities and cash or bank balance for meeting day-to-day expenses.

In the above case Ramnath purchasing the components on three month credit and selling the product in cash. In this situation the requirement of working capital will be reduced to the extent of credit he availed.


Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

  • Read the question carefully and focus on the core concept being asked.
  • Reference examples and data from the chapter when answering questions about Financial Management.
  • Review previous year question papers to get an idea of how such questions may be framed in exams.
  • Practice answering questions within the time limit to improve your speed and accuracy.
  • Discuss your answers with your teachers or peers to get feedback and improve your understanding.

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Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 5: Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new....