Indicate Whether Each of the Following Statements About Financial Statement

question 14

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
_____ a)Working capital is a measure of the amount of current assets a company would have left after paying its current liabilities.
_____ b)If a transaction causes a company's working capital to increase,the transaction caused the company to become less liquid.
_____ c)Interpretation of a company's working capital can be difficult because it is an absolute amount.
_____ d)The quick ratio is a less conservative variation of the current ratio.
_____ e)The quick ratio is usually calculated by using the following equation: cash + receivables + current marketable securities + prepaid expense/current liabilities

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