Cash and Bank Balances
Apart from WC needs for financing inventories and debtors, firms also find it useful to have some minimum cash balances with them. It is difficult to lay down the exact procedure of determining such an amount. This would primarily is based on the motives for holding cash balances of the business firm. attitude of management toward risk the access to the borrowing sources in times of need and past experience and so on.
Estimation of Current Liabilities
The working capital needs of ,business firms are lower to the that extent such needs are met through the current liabilities (other than bank credit) arising in the ordinary course of business. The important current liabilities (CL) in this context are, trade creditors, wages and overheads: