A Firm with Zero Net Working Capital Has

question 23

Multiple Choice

A firm with zero net working capital has:

• A) no cash or marketable securities.
• B) insufficient inventories.
• C) excessive current liabilities.
• D) a quick ratio of less than 1.0.

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Definitions:

Benchmarking

The process of comparing key points within your business with comparable points in another external entity.

External Entity

An organization, group, or individual that exists outside of the company and interacts with the business through transactions, partnerships, or other forms of engagement.

Total Quality Management

A methodology that emphasizes the importance of organizational culture in achieving long-term success through customer satisfaction and continuous improvement.

Feedforward Control

A management strategy that anticipates problems before they occur by monitoring inputs and taking preventative measures.