A Small Company Has Current Assets of $112,000 and Current

question 77

Multiple Choice

A small company has current assets of $112,000 and current liabilities of $117,000.Which of the following statements about that company is most likely to be TRUE?

• A)Since net working capital is negative,the company will not have enough funds to meet its obligations.
• B)Since net working capital is high,the company will likely have little difficulty meeting its obligations.
• C)Since net working capital is very high,the company will have ample money to invest after it meets its obligations.
• D)Since net working capital is nearly zero,the company is well run and will have little difficulty attracting investors.
• E)Since net working capital is negative,the company will likely have little difficulty meeting its obligations.