MS 41 IGNOU MBA Assignments Jan – June 2014

1. a) Explain the concepts of Working Capital. Discuss the various factors that affect the
requirement of Working Capital of a business entity.

b) Explain the distinguishing features of matching, conservative and aggressive strategies for financing working capital with the help of illustrations. Under which circumstances each of these are suitable?

2. Why do firms hold cash and marketable securities? Discuss the critical variables of Cash flow forecasting and the different forecasting approaches of cash flow

3. Explain the features of different forms of bank credit prevailing in India. Distinguish between pledge and hypothecation. Discuss the various methods of creating charge over the assets of the borrower in favour of the lender bank. Distinguish between Legal Mortgageand Equitable Mortgage.

4. What is the significance of Inventory control? Discuss the different models of inventory management.

5. From the following details you are required to make an assessment of the average amount of working capital requirement of Hindustan Ltd.

Particulars Average period of credit

Estimate for the Ist year


Purchase of Material 6 weeks


Wages 1 ½ weeks



Rent, Rates, etc. 6 months


Salaries 1 months


Other overheads 2 months


Sales Cash


Credit Sales 2 months


Average amount of stocks and works-in-progress  


Average amount of undrawn profit  


It is to be assumed that all expenses and income were made at even rate for the year.

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