Working Capital Quiz

What is the formula for calculating Working Capital?

• Current Assets x Current Liabilities

• Current Liabilities - Current Assets

• Current Assets - Current Liabilities

• Current Assets + Current Liabilities

Which of the following is NOT considered a current asset?

• Cash and cash equivalents

• Inventory

• Long-term investments

• Accounts receivable

What is the primary objective of cash management?

• Increase sales revenue

• Reduce inventory costs

• Maintain sufficient cash for payments

• Maximize profits

Which of the following is a key practice in receivables management?

• Market analysis

• Cash flow forecasting

• Credit policy establishment

• Inventory turnover analysis

Which of the following techniques is used in inventory management?

• Credit evaluation

• Debt collection

• Cash budgeting

• Economic Order Quantity

What is a common source of financing working capital?

• Bank loans

• Real estate sales

• Equity investments

• Long-term bonds

Which of the following is a benefit of effective receivables management?

• Reduced customer relationships

• Improved cash flow

• Higher collection costs

• Increased bad debts

What is the purpose of a cash budget?

• To track inventory levels

• To manage employee salaries

• To forecast cash collections and payments

• To analyze market trends

Which of the following is a component of receivables management?

• Credit evaluation

• Sales forecasting

• Cash flow analysis

• Inventory management

What does the Accounts Receivable Turnover Ratio indicate?

• Efficiency in managing inventory

• Liquidity of current assets

• Profitability of sales

• Efficiency in collecting receivables