State whether the working capital requirement of business manufacturing the following items are big or small. Justify your answer:
(i) Bread
(ii) Coolers
(iii) Sugar
(iv) Furniture
(v) Motor car
(vi) Locomotives

Explanation

(i) Bread It will requre less working captial, as it is sold for cash and there is no need to maintain inventory.
(ii) Furniture on orders No inventory has to be maintained, and also advance is sometimes taken, thus requiring less working capital.
(iii) Automobiles Huge working captial is required , as the production cycle is long and huge inventory has to be maintained.
(iv) Due to long operating cycle and seasonal nature of the product, huge stock is maintained. Thus, it requires large working capital.