There are several factors which determine the firm’s working capital needs. These factors are comprehensively covered by A Textbook of Business Finance by Manasseh (Pages 403 – 406). They however include:

 a) Nature and size of the business.

b) Firm’s manufacturing cycle

c) Business fluctuations

d) Production policy

e) Firm’s credit policy

f) Availability of credit

g) Growth and expansion activities.