Financial Statements for March Company Appear Below -March Company's Working Capital (In Thousands of Dollars)at the End

question 112

Multiple Choice

Financial statements for March Company appear below:

$\begin{array}{|l|r|}\hline&\begin{array}{r}\text { March Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year } \\2 \\\text { (dollars in thousands) } \\\end{array} \\\hline \text { Sales (All on Account) } & \$ 1610 \\\hline \text { Costs of Goods Sold } & \$ 1120 \\\hline \text { Gross Margin } & \$ 490 \\\hline \text { Operating Expenses } & \$ 190 \\\hline \text { Net Operating Income } & \$ 300 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 250 \\\hline \text { Income Taxes (30\%) } & \$ 75 \\\hline \text { Net Income } & \$ 175 \\\hline\end{array}$
-March Company's working capital (in thousands of dollars) at the end of Year 2 was closest to which of the following?

• A) $180.
• B) $520.
• C) $580.
• D) $1,290.

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Definitions:

Financial Condition

The status of an organization or individual's financial health, typically assessed through analysis of assets, liabilities, income, and expenditures.

Future

The time period that is to come, which is uncertain and yet to be determined.

Activity Ratios

Financial ratios that measure the speed with which various asset accounts are converted into sales or cash.

Asset Usage

Refers to how effectively a business utilizes its resources, including physical assets, to generate revenue or achieve its objectives.