Scribd
Upload
239 views7 pages

MCQ 5

Working capital refers to current assets minus current liabilities. Permanent working capital refers to the minimum amount of current assets needed, while temporary working capital varies with seasonal needs. A new personal computer would not be financed through working capital. The key difference between the current ratio and quick ratio is that the current ratio includes inventories in the numerator, while the quick ratio excludes inventories.

Uploaded by

mitalpt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
239 views7 pages

MCQ 5

Working capital refers to current assets minus current liabilities. Permanent working capital refers to the minimum amount of current assets needed, while temporary working capital varies with seasonal needs. A new personal computer would not be financed through working capital. The key difference between the current ratio and quick ratio is that the current ratio includes inventories in the numerator, while the quick ratio excludes inventories.

Uploaded by

mitalpt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 7

MCQ-5

1. To financial analysts, "working capital"


means the same thing as __________.
A. total assets
B. fixed assets
C. current assets
D. current assets minus current liabilities.
2. The amount of current assets required to
meet a firm's long-term minimum needs is
referred to as __________ working capital.
A. Permanent
B. Temporary
C. Net
D. gross
3. The amount of current assets that varies
with seasonal requirements is referred to as
__________ working capital.
A. Permanent
B. Net
C. Temporary
D. gross
4. Which of the following would not be
financed from working capital?
A. Cash float.
B. Accounts receivable.
C. Credit sales.
D. A new personal computer for the office.
5. What is the difference between the
current ratio and the quick ratio?
A. The current ratio includes inventories and the
quick ratio does not.
B. The current ratio does not include inventories and
the quick ratio does.
C. The current ratio includes physical capital and the
quick ratio does not.
D. The current ratio does not include physical capital
and the quick ratio does.
Answers
1. (C)
2. (A)
3. (C)
4. (D)
5. (A)

You might also like