A Corporation Had the Following Assets and Liabilities: What

question 67

Multiple Choice

A corporation had the following assets and liabilities: What is the amount of working capital and the working capital ratio? $$\begin{array} { | l | c | c | } \hline & \text { Working Capital } & \text { Working Capital } \\\hline & \underline { \text { Amount } } & \underline { \text { Ratio } } \\\hline 1 & \$ 6,400 & 1.10 \\\hline 2 & \$ 1,000 & 1.30 \\\hline 3 & \$ 1,000 & 1.06 \\\hline 4 & \$ 9,000 & 1.30 \\\hline\end{array}$$

• A)Choice 1
• B)Choice 2
• C)Choice 3
• D)Choice 4

Understand the significance of solvency, profitability, and liquidity in assessing a business's performance.

Grasp the concepts of various financial ratios and their impact on company evaluation.

Recognize the effects of different management practices on key financial ratios.

Evaluate a company's ability to meet its short-term and long-term obligations.

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Definitions:

Industrialized Country

A nation with a relatively high level of economic growth and security, often characterized by a strong industrial sector.

Divorce Rate

A statistical measure expressing the number of divorces in a given area or population within a certain time period.

Trial Marriage

A situation where a couple decides to live together for a period of time to test the compatibility of a lifelong commitment.

Cohabit

The action of living together and having a sexual relationship without being married.