Ratio of Working Capital To Capital Employed - SS2 Accounting Past Questions and Answers - page 1
1
What does the ratio of working capital to capital employed measure?
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A
The total funds invested in the business
B
The funds needed to support day-to-day operations
C
The proportion of working capital in relation to total assets
D
The ratio of debt to equity
2
What does a higher ratio of working capital to capital employed indicate?
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A
A company has more of its capital invested in long-term assets
B
A company has a larger portion of its capital invested in day-to-day operations
C
A company has high levels of debt
D
A company is experiencing financial distress
3
What is the significance of the ratio of working capital to capital employed for investors and analysts?
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A
To assess a company's financial health
B
To evaluate a company's marketing strategy
C
To understand a company's customer base
D
To measure a company's employee productivity
4
What is working capital?
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A
The total funds invested in the business
B
The funds needed to support day-to-day operations
C
The proportion of working capital in relation to total assets
D
The ratio of debt to equity
5
What does the ratio of working capital to capital employed tell us about a company's financial situation?
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6
Why is the ratio of working capital to capital employed important for investors and analysts?
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