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.