Question : Working capital is the difference between
Option 1: Total debt and long term debt
Option 2: Liquid assets and current liabilities
Option 3: Current assets and current liabilities
Option 4: Total assets and current liabilities
Correct Answer: Current assets and current liabilities
Solution :
Answer = Current assets and current liabilities
Working capital is the difference between a company's current assets (such as cash, accounts receivable, and inventory) and its current liabilities (such as accounts payable and short-term debt). It represents the amount of funds available for day-to-day operations.
Working capital = current assets – current liabilities. Hence, the correct option is 3.
Question :
Working Capital Rs.45,000; Total Debt Rs. 1,00,000 and Long-term Debt Rs.70,000.
The value of Current liabilities are ________.
Option 1: Rs. 70,000
Option 2: Rs. 1,00,000
Option 3: Rs. 30,000
Option 4: Rs. 45,000
Question : Which of the following tells the working capital?
Option 1: Difference between Current Assets and Fixed Assets
Option 2: Difference between Current Assets and Current Liabilities
Option 3: Difference between Current Liabilities and Current Assets
Option 4: None of the above.
Question : The formula for ascertaining Total Assets to Debt Ratio is _______.
Option 1: Total Assets/Long term Loans
Option 2: Tangible Assets/Long term Loans
Option 3: Current Assets/Total Liabilities
Option 4: Total Assets/Total Liabilities
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