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