Balance Sheet the Balance Sheet for a Small Firm

question 67

Multiple Choice

Balance Sheet The balance sheet for a small firm is shown above. All amounts are in thousands of dollars. What is this firm's Net Working Capital?

• A) $126 thousand
• B) $7 thousand
• C) $46 thousand
• D) $86 thousand

Analyze the impact of dividend changes on cash flow to stockholders.

Recognize components of current assets and their liquidity.

Interpret the statement of financial position identity and its components.

Understand free and operating cash flows and their implications.

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Definitions:

Numerator

The top number in a fraction or ratio that represents the part of the whole being considered.

Denominator

In mathematics, the denominator is the bottom part of a fraction that indicates how many equal parts the whole is divided into.

Working Capital Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with its current assets.

Acid-test Ratio

The acid-test ratio, also known as the quick ratio, measures a company's ability to pay its current liabilities without needing to sell inventory.