Working capital turnover ratio is the ratio between the net revenue or turnover and the working capital of a business. The ratio indicates how effectively a company uses the available funds for streamlined production of goods or services.
Working capital of a business is the difference in values of its current assets and its current liabilities. If the annual turnover of a business is Rs. 45 Lakh and average working capital Rs. 4 Lakh, then the turnover ratio is 5 (20,00,000/4,00,000).
A positive turnover ratio means that a business is using its working capital justifiably. It also means that the business is effectively using its current assets to manage production. Any sudden rise in sales or demand for products may not create shortfalls in inventory with a high turnover ratio.
On the other hand, a low capital turnover ratio means that the company is investing more in inventory. It may also mean that the organisation has too many outstanding liabilities with its suppliers. Such a low working capital turnover ratio can lead to inventory shortage or bad debts.
Accumulation of such debts can hamper the operations of a business considerably. A Working Capital Loan from Bajaj Finserv offers up to Rs. 45 lakh can help address such financial constraints to revive optimised business operations. The loan is available in a flexi format, which is the perfect solution for working capital management. To suit your dynamic working capital needs, you can borrow as and when you need from a pre-sanctioned pool of funds and repay EMIs as and when your firm has excess cash, at no extra cost. To add to your convenience, interest is charged only on the sum you borrow (and not on the full loan amount) and you have the option of paying only interest as EMIs (with the principal repayable at the end of the tenor).
MSME stands for Micro, Small and Medium Enterprise. It was introduced by the Government of India in agreement with the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. As per this act, MSMEs are the enterprises involved in the production, processing or preservation of goods and commodities. Vital for economic growth, this sector contributes around one-third of the country’s GDP and generates employment for around 110 million of the population.
It also plays an important role in the socio-economic development of the country as many of these enterprises operate in rural India. According to the Government's annual report of 2018-2019, more than 6 lakh MSMEs operate in the country.
Initially, MSMEs were classified based on two factors - investment in plant/machinery and an annual turnover of the enterprises. However, the Ministry of Micro, Small and Medium Enterprises has recently revised the classification by combining these two factors into a single criterion.
The MUDRA loan is provided under the Pradhan Mantri MUDRA Yojana (PMMY) to non-farming and non-corporate micro and small enterprises. These enterprises can avail loans up to Rs.10 lakh under the MUDRA (Micro Units Development & Refinance Agency Ltd.) scheme.
We have discontinued this product (MUDRA Loan) at this time. Please reach out to us on +91-8698010101 to know more about the current financial services provided by us.
|Loan amount under Shishu||Up to Rs.50,000|
|Loan amount under Tarun||Rs.50,001 to Rs.500,000|
|Loan amount under Kishore||Rs.500,001 to Rs.10,00,000|
|Processing fees||0.5% for Tarun Loan, nil for others|
|Eligibility criteria||New and Existing Units|
|Repayment period||3-5 Years|
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