Practice Working Capital (5.2) - Business Size and Finance

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8 questions

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Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
Define working capital.
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Think about what kind of expenses a business has.
Question 2.
What is the formula for calculating working capital?
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Remember how assets and liabilities are defined.
3Question 3.
What does working capital refer to?
- Funds for day-to-day operations
- Long-term investment
- Total assets
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Think about the expenses that occur each day.
4Question 4.
True or False? Low working capital can indicate a potential liquidity issue.
- True
- False
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Consider what happens when you don't have enough cash.
Question 5.
A company has current assets of $100,000 and current liabilities of $80,000. Calculate its working capital. How might this amount affect the company's operations?
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Use the formula we discussed!
Question 6.
Consider a retail business that has declining sales during the winter season but high inventory costs. What strategies should it deploy to maintain strong working capital?
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Think about balancing expenses and income in varying market conditions.

4 more questions in this section. Enroll free to practise them all.