VXL Ltd. is a company dealing in dairy products. It procures these products from Rajasthan & sells them to various parts of Delhi . A month before ' Merion Ltd'., a Haryana based company entered Delhi market with a similar range of products . State the impact of entry of Haryana based ' Merio Ltd.' on the working capital requirement of VXL Ltd . Also , name the factors affecting the working capital requirements of VXL Ltd.
Dear student
The entry of Haryana based ‘Merio Ltd.’ will increase the working capital requirements of VXL Ltd as it may necessitate higher stocks of finished goods to meet urgent orders from customers.
OR
The entry of Haryana based ‘Merio Ltd.’ will increase the working capital requirements of VXL Ltd as competition may force it to extend liberal credit terms.
Factor affecting working capital requirements is:
Level of competition.
Regards
The entry of Haryana based ‘Merio Ltd.’ will increase the working capital requirements of VXL Ltd as it may necessitate higher stocks of finished goods to meet urgent orders from customers.
OR
The entry of Haryana based ‘Merio Ltd.’ will increase the working capital requirements of VXL Ltd as competition may force it to extend liberal credit terms.
Factor affecting working capital requirements is:
Level of competition.
Regards