A firm’s forecast level of sales will have a major impact on the required level of working capital. Deviations in sales cause spontaneous changes in the firm’s level of current assets and current liabilities. Growth in sales may produce the need for additional short-term financing. A firm’s ability to generate sales continuously results in a portion of its spontaneous current assets and current liabilities becoming permanent. The factors which affect working capital requirements are major considerations in determining the policies which management may adopt.