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Net working capital Answer: b Diff: E
. Net working capital may be defined as current assets minus current liabilities. This also defines the current ratio.
a. True
b. False
Net working capital Answer: b Diff: E
. Net working capital is defined as current assets divided by current liabilities.
a. True
b. False
Working capital Answer: b Diff: E
. An increase in a current asset account must be accompanied by a corresponding increase in a liability account.
a. True
b. False
Working capital policy Answer: a Diff: E
. Determination of a firm’s investment in net operating working capital and how that investment is financed are elements of working capital policy.
a. True
b. False
Goal of cash management Answer: a Diff: E
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