Quiz Ch 04 – T/F Calculating Net Working Capital
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Net working capital is derived by subtracting current liabilities from current assets.
True or false: Net working capital is derived by subtracting current liabilities from current assets.
True or false: Efficiency ratios cover the asset turnover ratio and inventory turnover ratio.
True or false: Both net working capital to total assets and current ratio are categorized as liquidity ratios.
True or false: Both return on assets and return on equity are categorized as profitability ratios.
True or false: The net working capital to total assets ratio consistently surpasses the current ratio.
True or false: The return on assets typically exceeds the return on equity.
True or false: The disparity between the current and quick ratios arises from the exclusion of inventory from current assets in the latter.
True or false: Excess inventory can result in a healthy current ratio and an unhealthy quick ratio.
True or false: Economic Value Added may not be an ideal measure for the financial performance of Hollywood movies due to their early profit generation.
True or false: Both the receivable turnover ratio and the asset turnover ratio are considered efficiency metrics.