What do you call a capital which is needed to fund the normal, day to day operations?
Answer & explanation
Correct answer: option 2
Gross working capital (also known as current capital or circulating capital) is the sum total of
all current assets of the business. These include cash, inventory (raw materials, work in process,
finished goods, spares etc) and accounts receivable (or trade debtors). Current assets comprise
items that would get converted in to cash in the short-run, say, within the normal operating
cycle (or cash conversion cycle) of the business.