IB Business Management SL 3.7.2 Working capital Question Bank

In anticipation of increased sales during the period April through September, Fishers must increase production starting in March. Thus, it buys more stock, which increases both current assets (stock, which later become debtors) and current liabilities (short-term borrowings and creditors). Fishers maintains this higher volume of trading (and levels of current assets and current liabilities) until sales start to contract in October. In anticipation of lower sales from October through March, the reverse of the process above occurs.

If candidates simply say that the increase is "due to peak sales" (or something very similar), do not award credit.
N.B. Application may be limited or nominal, which is acceptable, provided that the response is relevant.

Award [1] for a basic explanation that conveys partial understanding.
Award [2] for a full explanation that conveys knowledge and understanding similar to the above.