Monitoring Business Finance using Accounts (LC 2026) (Leaving Cert Business): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What does liquidity refer to?
What does liquidity refer to?
A company's ability to pay short-term debts
How is working capital calculated?
How is working capital calculated?
Current assets minus current liabilities
What does positive working capital indicate?
What does positive working capital indicate?
Enough short-term assets to cover obligations
When is working capital negative?
When is working capital negative?
When current liabilities exceed current assets
With positive working capital, why optimise inventory levels?
With positive working capital, why optimise inventory levels?
To prevent overstocking & free up cash
What should excess cash be invested in when working capital is positive?
What should excess cash be invested in when working capital is positive?
Short-term investments providing liquidity
Why reduce inventory when working capital is negative?
Why reduce inventory when working capital is negative?
To release cash & minimise carrying costs
What practice keeps stock aligned with immediate needs when working capital is negative?
What practice keeps stock aligned with immediate needs when working capital is negative?
Just-in-time practices
Which financing solutions can bridge gaps when working capital is negative?
Which financing solutions can bridge gaps when working capital is negative?
Overdrafts or working capital loans
In positive working capital, how do current assets compare to current liabilities?
In positive working capital, how do current assets compare to current liabilities?
Current assets are greater than CL