Which of the following factors determine the requirements of working capital of a firm?

a. Nature of Business

b. Technology and Manufacturing Policy

c. Management Skills

d. Credit Policy

e. Market and Demand Conditions

Choose the correct answer from the options given below:

The correct answer is a, b, d, and e only.

Key Points a. Nature of Business: The type of business and its operational characteristics can impact the working capital needs. Different industries and sectors may have varying requirements for inventory, receivables, and payables.

b. Technology and Manufacturing Policy: The adoption of technology and manufacturing policies can affect the efficiency of operations, which in turn can influence the working capital requirements. Streamlined and efficient processes may reduce the need for excess working capital.

d. Credit Policy: The firm's credit policy, including its approach to extending credit to customers and managing payables to suppliers, can impact the working capital needs. More lenient credit terms may require higher working capital for accounts receivable.

e. Market and Demand Conditions: Market conditions and fluctuations in demand can affect the working capital requirements. During periods of high demand or seasonality, a firm may need to increase its working capital to manage inventory levels and meet customer demand.

Hence, the correct answer is a, b, d, and e only