CAPITAL STRUCTURE & WORKING CAPITAL

Front

What does this represent? Options: Cash flow, Business Activity, Working capital cycle, Liquidity cycle

Back

Working capital cycle

Front

Sufficient working capital is needed to prevent a business from becoming insolvent.

Back

True

Front

The _________________ the amount of time between buying materials (inputs) to receiving payments from the customer the higher the risk to a firm.

Back

Longer

Front

Which of the following could be turned into cash the easiest or quickest? Raw materials, Finished product, Semi-finished product, None of these

Back

Finished product

Front

A company with more current assets has a low level of liquidity and therefore is low risk.

Back

Front

A company that use more current liabilities will have higher level of liquidity as well as its profitability.

Back

Front

The cheapest source of finance is

Back

Retained Earnings

Front

Net Working capital refers to

Back

Current Assets - Current Liabilities

Front

A fixed assets of business firm should be financed through: Long term liability, Short term Liability, A Mix of long term and short term liability, None of the above

Back

Long term liability

Front

Which of the following is NOT true of working capital?
Options:
It is the amount of capital the firm has available to pay for its operations
The amount of money a firm has to spend in the short term
It is a measure of the firm's liquidity
It is the sum total of a firm's fixed assets

Back

It is the sum total of a firm's fixed assets