An Aggressive Working Capital Policy Would Have Which of the Following

question 28

Multiple Choice

An aggressive working capital policy would have which of the following characteristics?

• A) a high ratio of long-term debt to capital assets
• B) a low ratio of short-term debt to total debt
• C) a high ratio of short-term debt to long-term sources of funds
• D) a short average collection period

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Definitions:

Business Plan

A document that outlines the operational and financial objectives of a business, and details the strategies and timelines for achieving these goals.

Small Business Development Center

A local resource that provides aspiring and existing small business owners with business training, consulting, and support, often funded by government and educational institutions.

Breakeven Point

The financial point at which costs equal revenues, such that no profit is made but no losses are incurred either.

Sales And Costs

A business concept that refers to the total revenue generated from goods or services sold and the expenses incurred in the production or delivery of those goods or services.