finance2

Working capital represents the portion of current assets financial through long term funds. This indicates (1) net working capital and (2) gross working capital:

• 1 is correct

• 2 is correct

• Both 1 and 2 are correct

A positive working capital means that –

• the company is able to pay-off its long-term liabilities.

• the company is unable to meet its short-term liabilities.

• the company is able to pay-off its short-term liabilities.

For reducing and controlling working capital requirement which of the following step is required to be taken –

• Increase in manufacturing cycle

• Increase of credit period allowed by creditors to the extent that do not affect the production.

• Increase of credit period allowed by creditors to the extent that do not affect the production.

A negative working capital means that -………..

• the company currently is able to meet its short-term liabilities

• the company currently is unable to meet its short-term liabilities

Which of the following is determinant of working capital?(1) Nature and size of business(2) Manufacturing cycle(3) Credit policy(4) Production policy

• 1) and (2) only

• 1), (2) and (3) only

• (1), (2), (3) and (4)

For reducing and controlling working capital requirement which of the following step is required to be taken –i) Reduction of manufacturing cycle.

(ii) Increase of credit period allowed by creditors to the extent that do not affect the production.

(iii) Reduction in credit period given to customers.

Select the correct answer from the options given below

• (ii) & (iii)

• All of the above

• (i) & (ii)