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Unformatted text preview: Concept of working capital includes meaning of working capital and its nature. Working capital is the investment in current assets. Without this investment, we can not operate our fixed assets properly. For getting good profits from fixed assets, we need to buy some current assets or pay some expenses or invest our money in current assets. For example, we keep some of cash which is the one of major part of working capital. At any time, our machines may need repair. Repair is revenue expense but without cash, we can not repair our machines and without machines, our production may delay. Like this, we need inventory or to invest in debtors and other short term securities. On the basis of Concept, we can divide our working capital into two parts: 1. Gross Working Capital In this concept of working capital, we study gross working capital. We do not deduct current liabilities in this concept but we use current In this concept of working capital, we study gross working capital....
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- Fall '10