Increased Needs for Net Working Capital Are

question 32

Multiple Choice

Increased needs for net working capital are:

• A) recognized in pro forma balance sheets.
• B) absorbed into the pro forma plug figures.
• C) typically financed with debt.
• D) ignored due to their great variability.

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Definitions:

Book Value

The net value of a company's assets found on its balance sheet, calculated as total assets minus intangible assets and liabilities.

Sale

A sale involves the transaction of goods or services from seller to buyer in exchange for money or other compensation.

Asset

An asset held or managed by a person, business, or nation, anticipated to yield future advantages.

Cash Received

The total amount of cash collected by a company during a specific period, including revenues, loans, and investments.