WORKING CAPITAL MANAGEMENT

To financial analysts, “Working Capital” means the same as:

• Current Assets – Total Liabilities

• Total Assets – Current Liabilities

• Total Assets – Total Liabilities

• Current Assets – Current Liabilities

What are the aspects of Working Capital Management?

• Receivable management

• Inventory management

• Cash management

• All of the above

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

• True

• False

Working capital management focuses on the current assets and long term liabilities that determine the liquidity.

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Temporary current assets are assets that fluctuate with seasonal variations in a firm's business.

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Current assets consist of cash, marketable securities, notes payable and inventories.

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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

What is the classification of Working Capital based on time :

• Gross and Net

• Permanent and Temporary

• Current and Quick

• None of these

When Core Working Capital plus some part of temporary is financed from long term funds then it is known as

• Aggressive approach

• Conservative approach

• Matching approach

• None of these

Which of the following would be consistent with a more aggressive approach to financing working capital?

• Financing short-term needs with short-term funds.

• Financing permanent inventory buildup with long-term debt.

• Financing seasonal needs with short-term funds.

• Financing some long-term needs with short-term funds.