Practice Working Capital (6.2) - Business Size and Finance

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9 questions

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3 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is working capital?
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Think about current assets and liabilities.
Question 2.
List two components of working capital.
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Consider items that affect cash flow.
3Question 3.
What is the formula for calculating working capital?
- Current Assets - Current Liabilities
- Current Liabilities - Current Assets
- Total Assets - Total Liabilities
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Remember the fundamental formula for liquidity.
4Question 4.
True or False: Working capital is only important for large businesses.
- True
- False
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Consider the day-to-day operations.
Question 5.
A company has current assets totaling $150,000 and current liabilities of $100,000. Calculate the working capital and discuss its implications for the company's operations.
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Consider the impact of having both surplus and deficit working capital.
Question 6.
Discuss a scenario where high accounts receivable could cause working capital issues. What strategies would you recommend to address these problems?
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Reflect on customer payment behaviors and impacting cash flow.

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