Statements concerning net working capital

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Reference no: EM131625411

1. Which one of the following statements concerning net working capital is correct?

The lower the value of net working capital is, the greater is the ability of a firm to meet its current obligations.

An increase in net working capital must also increase current assets.

Firms with equal amounts of net working capital are also equally liquid.

Net working capital increases when inventory is sold for cash at a profit.

Net working capital is a part of the operating cash flow.

2. Industrial groups are _____.

a. privately held companies and the stock of such firms are not traded publicly

b. organizations that encompass firms involved in financing and marketing only

c. organizations that tie together all the functions of production and sales from start to finish

d. led by the firm involved with manufacturing and distribution of products

e. owned and managed by the Securities and Exchange Commission

Reference no: EM131625411

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