Working Capital Management Quiz Set 2

1. Which of the following would be consistent with a conservative approach to financing working capital?

Correct! Wrong!

2. Which of the following would be consistent with a hedging (maturity matching) approach to financing working capital?

Correct! Wrong!

3. Which of the following statements is most correct?

Correct! Wrong!

4. The amount of current assets that varies with seasonal requirements is referred to as __________ working capital?

Correct! Wrong!

5. Having defined working capital as current assets, it can be further classified according to __________?

Correct! Wrong!

6. Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate form for financing a new capital investment in plant and equipment?

Correct! Wrong!

7. Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate nonspontaneous form for financing the excess seasonal current asset needs?

Correct! Wrong!

8. Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total long-term financing?

Correct! Wrong!

9. Which of the following statements is correct for a conservative financing policy for a firm relative to a former aggressive policy?

Correct! Wrong!

10. Which of the following statements is correct for an aggressive financing policy for a firm relative to a former conservative policy?

Correct! Wrong!

11. How can a firm provide a margin of safety if it cannot borrow on short notice to meet its needs?

Correct! Wrong!

12. Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to __________?

Correct! Wrong!

13. If a company moves from a "conservative" working capital policy to an "aggressive" policy, it should expect __________?

Correct! Wrong!

14. To financial analysts, "net working capital" means the same thing as __________?

Correct! Wrong!

15. Working Capital Turnover measures the relationship of Working Capital with?

Correct! Wrong!

16. Dividend Payout Ratio is?

Correct! Wrong!

17. Inventory Turnover measures the relationship of inventory with?

Correct! Wrong!

18. The term 'EVA' is used for?

Correct! Wrong!

19. In Current Ratio, Current Assets are compared with?

Correct! Wrong!

20. There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?

Correct! Wrong!

Working Capital Management Quiz Set 2

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