Working capital is an indication of the firm’s ________.A. asset utilizationB. amount of noncurrent liabilitiesC. liquidityD. amount of noncurrent assets
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A. asset utilization
B. amount of noncurrent liabilities
C. liquidity
D. amount of noncurrent assets
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- Define (a) return on investment, (b) risk, (c) financial flexibility, (d) liquidity, and (e) operating capability.The cost of equity is _______. A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnoverNetworking capital refers to the A) firms investment in total assets B) firms' investment in current assets C) difference between the firm's current assets and its current liabilities D) Difference between the firms total assets and its total liabilities
- Net working capital is defined as (select one): A. current assets minus current liabilities. B. a ratio measure of liquidity best used in cross-sectional analysis. C. current liabilities minus current assets. D. the portion of the firm's assets financed with short-term funds.The amounts needed to compute a company's working capital come from which of the following financial statements? Select one:a More than one will be needed b. Balance Sheet c Income Statement d None of the optionse Cashflow statementThe primary objective of working capital management is to A. maximize the company's total current assets. B. minimize the company's total current liabilities C. achieve a balance between risk and return. D. balance the amount of current assets and current liabilities.
- Briefly explain the meaning of working capital and working capital management. Also explain the relationship of current asset policy with liquidity, profit and risk. Which policy do you think is good?Capital gearing ratio indicates the relationship between A. assets and capital B. loans and capital C. equity shareholders fund and long term borrowed funds D. debentures and share capitalExplain why the required rate of return on a firm's assets must be equal to the weighted average cost of capital associated with its liabilities and equity. Explain using the concepts from the course.
- Deciding a firm's capital structure can be understood as: a. a capital budgeting decision b. a capital structure decision c. a primary market decision d. an asset efficiency decisionn\Working capital management refers toa) the management of cash flowsb) capital structurec) long-term financing decisionsd) investing in product developmentExplain briefly what working capital and working capital management are and what they do. Explain the link between current asset policy and liquidity, profit, and risk as well as any other relevant factors. So, which policy do you believe to be the most beneficial?
