Question

In: Finance

?5 Which one of the following will decrease net working capital? Assume the current ratio is...

?5

Which one of the following will decrease net working capital? Assume the current ratio is greater than 1.0.

Multiple Choice

A.Selling inventory at cost

B. Collecting payment from a customer

C.Paying a dividend to shareholders

D.Selling a fixed asset for less than book value

E. Paying a supplier for prior purchases

Solutions

Expert Solution


Related Solutions

Which one of the following will increase net working capital? Multiple Choice A decrease in cash....
Which one of the following will increase net working capital? Multiple Choice A decrease in cash. An increase in accounts payable. An increase in depreciation. A profitable sale of inventory. The write-off of a bad debt.
What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive.
What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive.1) inventory is sold for a profita. not change                                      b. decrease                                 c. increase                d. there is not enough information to answer this question                         
The major difference between the current ratio and net working capital is? a. Interpretation of the...
The major difference between the current ratio and net working capital is? a. Interpretation of the current ratio does not depend on the firm's industry. b. The current ratio is more stable throughout the year. c. They are calculated using different variables d. Interpretation of the current ratio does not depend on firm size.
A decrease in which one of the following accounts increases a firm's current ratio as well...
A decrease in which one of the following accounts increases a firm's current ratio as well as its quick ratio? A. Accounts payable B. Cash C. Accounts receivable D. Inventory E. Fixed assets
Calculate the following measurements: working capital, current ratio, profitability rate/percentage, and net income percentage. Comment with...
Calculate the following measurements: working capital, current ratio, profitability rate/percentage, and net income percentage. Comment with 2-3 sentences about how your business is performing after one month of operations. You opened a new pet supplies store and named it Ozzie’s Pet Supply and Boarding on December 1, 2019. The following information about December’s transactions, accounts, and adjustment data is available. Transactions: Dec. 1 Family members contributed $50,000 cash to the business in exchange for capital. Dec. 2 Purchased $10,800 of...
Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are...
Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Liquiform Inc.: Cash $ 70,000 Short-term investments 60,000 Accounts receivable 80,000 Inventory 100,000 Prepaid insurance 10,000 Accounts payable 75,000 Taxes payable 25,000 Salaries and wages payable 40,000 Short-term loans payable 60,000 Required: 1. Use the information provided to compute the amount of working capital and Liquiform's current and quick ratios (round to two decimal points). Working capital $ Current...
19. Which one of the following is a working capital decision? a. What debt-equity ratio is...
19. Which one of the following is a working capital decision? a. What debt-equity ratio is best suited to the firm? b. What is the cost of debt financing? c. Should the firm borrow money for five or for ten years? d. How much cash should the firm keep in reserve? 25. City Plumbing has inventory of $287,800, equity of $538,800, total assets of $998,700, and sales of $1,027,400. What is the common-size percentage for the inventory account? a. 28.02percent...
Why a company with high current ratio and net working capital would still have a liquidity...
Why a company with high current ratio and net working capital would still have a liquidity problem and not able to cover daily routine expenses.
For company Exxon Mobil stock symbol XOM Liquidity (current ratio, quick ratio, and net working capital-to-sales...
For company Exxon Mobil stock symbol XOM Liquidity (current ratio, quick ratio, and net working capital-to-sales ratio) Operating performance ratio (Days of Sales in Inventory, Days of Sales in Receivables), turnovers Profitability ratios (Gross Profit Margin, Operating Profit Margin, Net Profit Margin) Return on Investment ratios: (Basic Earning Power ratio, ROA, ROE) You can find financial ratios for the company for the last 3-5 years in the Internet (www.morningstar.com) a) Present the ratios as the table(s) in your project. Create...
SDJ, Inc., has net working capital of $1,965, current liabilities of $5,460, and inventory of $2,170. What is the current ratio? What is the quick ratio?
Calculating Liquidity Ratios SDJ, Inc., has net working capital of $1,965, current liabilities of $5,460, and inventory of $2,170. What is the current ratio? What is the quick ratio?Net Working Capital$      1,965.00Current Liabilities$      5,460.00Inventory$      2,170.00Current RatioQuick Ratio03.04 Calculating Inventory Turnover Bobaflex Corporation has ending inventory of $527,156 and cost of goods sold for the year just ended was $8,543,132. What is the inventory turnover? The days’ sales in inventory? How long on average did a unit of inventory sit on...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT