WORKING CAPITAL ESTIMATION

What does this represent?

• Cash flow

• Business Activity

• Working capital cycle

• Liquidity cycle

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

• True

• False

• Not sure

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

• Longer

• Shorter

• Medium

• None of these

Which of the following could be turned into cash the easiest or quickest?

• Raw materials

• Finished product

• Semi-finished product

• None of these

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

• 
• 
• NOT SURE

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

• 
• 
• NOT SURE

The cheapest source of finance is

• Equity Shares

• Preference Shares

• Retained Earnings

• Debentures

Net Woking capital refers to

• Total current Assets

• Current Asset + Current Liabilities

• Current Assets - Current Liabilities

• Current Liabilities - Current Assets

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

• A Mix of long term and short term liability None of the above

Which of the following is NOT true of working capital?

• 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