Lilly's Corporation Has Working Capital of $620,000,and Harmon Corporation Has

question 95

Multiple Choice

Lilly's Corporation has working capital of $620,000,and Harmon Corporation has working capital of $840,000.Which of the following statements is incorrect?

• A) Since working capital is an absolute amount,other factors such as size of the company and materiality will help to determine liquidity of these two companies.
• B) Since Harmon's working capital exceeds Lilly's working capital,it is safe to conclude that Harmon is more liquid than Lilly.
• C) If Lilly Corporation is smaller than Harmon or has lower current liabilities;Lilly could be more liquid than Harmon.
• D) None of these answers is correct.

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Definitions:

Percentage Change

A mathematical calculation to determine the degree of change over time, expressed as a percentage.

Imports

Goods or services brought into one country from another, contributing to the supply in the domestic market and affecting the nation's trade balance.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to national income.

GDP

Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country in a specified period.