An efficient and productive finance manager always maintains the amount of working capital that is required to run an organization at each level of production. For this purposes, there are certain reliable sources from where these requirements could be fulfilled.

In this context, the requirement of working capital has two major divisions:

  1. Long-term Source
  2. Short-term Source

Long-term Sources

  1. Share Capital
  2. Ploughing Back to Profits
  3. Sale of Debentures
  4. Term Loans
  5. Sale of Fixed Assets

Short-term Sources

This is again divided into two categories:

  1. Internal Sources:
  1. Accrued Expenses
  2. Provision of Taxation
  3. Depreciation Funds
  1. External Sources:
  1. Bank Credit
  2. Trade Credit
  3. Public Deposits
  4. Government’s Assistance
  5. Credit Papers
  6. Factoring
  7. Loans from Directors, etc.


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