Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) The main components of net working capital are cash, inventory, receivables, and payables.
• B) The firm's cash cycle is the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product.
• C) Working capital includes the cash that is needed to run the firm on a day-to-day basis. It does not include excess cash, which is cash that is not required to run the business and can be invested at a market rate.
• D) If the firm pays cash for its inventory, the firm's operating cycle is identical to the firm's cash cycle.

Understand how to calculate and interpret the gross margin ratio.

Identify and understand the components and significance of ending inventory.

Calculate and understand the implications of the current ratio and acid-test ratio for business liquidity.

Understand the calculation and business implications of the acid-test ratio.

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Definitions:

Family History

Information about diseases and health conditions that have occurred in a person's direct and close relatives, used for medical assessment and risk evaluation.

Breast Cancer

A malignant tumor that originates in the breast cells, one of the most common cancers among women.

Stage II

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A type of cancer that begins in the lungs, often associated with smoking, characterized by the uncontrolled growth of abnormal cells.