Patrick Has a Great Idea for a New Business Venture

question 37

Multiple Choice

Patrick has a great idea for a new business venture.Even after conducting research he is not certain whether he can make a go of it.Patrick is concerned about:

• A)risk.
• B)pure risk.
• C)business risk.
• D)market risk.

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Definitions:

Long-term Liabilities

Financial obligations of a business that are due more than one year in the future, such as bonds payable, long-term loans, and lease obligations.

Accounts Payable

Obligations owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets, indicating liquidity.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its day-to-day operations.