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

question 91

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.

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Definitions:

Compensating Differential

A difference in wages that arises to offset the desirability or undesirability of a job due to its characteristics.

Alaskan Fishermen

Individuals or groups involved in the fishing industry in Alaska, often dealing with challenges such as overfishing, environmental changes, and regulatory issues.

Gender Discrimination

Unjust treatment of individuals based on their gender, leading to disparity in opportunities, pay, and representation.

Demand

The measure of a good or service's demand that consumers are interested in and able to buy at a variety of price ranges during a predetermined period.