The nature of the business should be considered for the calculation on working-capital only to the tune of the cash nature of business and sale of services rather than commodities. These are the things considered only on the basis of stock, book volume of debts and so on.

Production Cycle

The need of the working capital is determined on the basis of duration of the production cycle. The time duration taken by the manufacturing process should be considered from the stage of raw materials to the stage of finished goods. If the duration is lengthier may require the firm to keep more amount on working capital to meet out the requirements.

Business Cycle

The business cycle should also be considered relatively as per the need of the working capital. While the business is in upswing it is very important that at this point of time the business ventures should increase there investment capital leading to increase In the sales volume resulting in the increase in the stock volume and so on. However during the downswing the business should have lower working-capital resulting in the decrease in the business volume and so on.

Production Policy

The requirement on working-capital is determined on the basis of production policy of the firm. Normally the production policy of the firm is classified on the basis of two methodologies. They are the firm produces the goods then and there to the tune of immediate needs of the market. This may require the firm to meet adversities due to lack on working-capital to meet out, due to in adequate planning. During the peak season, it requires enormous working-capital which may disturb working conditions of the business venture. And the other is the production policy which should be made keeping in mind the future demands. This will going to give steady output for the long term which is also due to the effective planning.

Growth and Expansion

The growth and expansion prospects of the firm should be appropriately determined in order to identify the volume on working-capital  required during the future, unless otherwise that will badly affect the future development of the firm.