Working Capital Management Quiz

What is working capital used for?

• Traveling expenses

• Buying video games

• Daily operational activities

• Buying toys

What is the main source of working capital?

• Investments in stocks

• Gifts from family

• Sales revenue

• Loans from friends

What does quantitative working capital include?

• Only profits

• All current assets

• Only cash

• Only debts

What is qualitative working capital?

• Funds for buying new equipment

• Ready funds for immediate obligations

• Money for future projects

• Savings for vacations

What is a component of real working capital?

• Fixed assets

• Long-term investments

• Cash

• Future sales

What is the total current assets in the example balance sheet?

• 1,500 million

• 1,000 million

• 2,000 million

• 1,920 million

What is the total liabilities in the example balance sheet?

• 1,800 million

• 2,500 million

• 4,000 million

• 3,270 million

What is the formula for calculating working capital?

• Current profits minus future profits

• Total assets minus total liabilities

• Total sales minus total expenses

• Current assets minus current liabilities

What is the aggressive approach in funding?

• Using only cash savings

• Using short-term loans for permanent assets

• Avoiding any loans

• Using only long-term loans

What does the conservative approach focus on?

• Avoiding all loans

• Using more long-term loans

• Using more short-term loans

• Using only cash