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Working capital is calculated as:

• Current assets + Current liabilities
• Current assets - Current liabilities
• Fixed assets - Current liabilities
• Total assets - Total liabilities

Which is NOT a current asset?

• Inventory
• Trade receivables
• Machinery
• Cash

Positive working capital indicates:

• Current liabilities > Current assets
• Current assets > Current liabilities
• Equal assets and liabilities
• High profitability

Negative working capital may lead to:

• Increased profits
• Illiquidity
• Higher market share
• Lower costs

The working capital cycle measures:

• Annual profit
• Time between buying stock and receiving payment
• Employee productivity
• Asset depreciation

A business can be profitable but fail due to:

• High market share
• Cash flow problems
• Too many assets
• Low prices

Which is a capital expenditure?

• Buying raw materials
• Paying wages
• Purchasing machinery
• Paying electricity bill

Revenue expenditure appears on:

• Balance sheet
• Income statement
• Cash flow forecast
• Share certificate

A cash flow forecast helps predict:

• Annual profits
• Future cash shortages
• Market trends
• Employee turnover

Net cash flow equals:

• Total sales - Total costs
• Cash inflows - Cash outflows
• Assets - Liabilities
• Revenue - Expenses