[amp_mcq option1=”Having low amount of working capital” option2=”High turnover of working capital” option3=”Sales are less compared to assets employed” option4=”Low turnover of working capital” correct=”option2″]<\/p>\n
The correct answer is: B. High turnover of working capital<\/strong>.<\/p>\n Working capital is a measure of a company’s ability to meet its short-term financial obligations. It is calculated by subtracting current liabilities from current assets. A high turnover of working capital means that a company is able to generate a lot of sales with a relatively small amount of working capital. This is a good thing, as it indicates that the company is efficient in its use of resources.<\/p>\n A low turnover of working capital means that a company is not generating as much sales as it could with its current level of working capital. This could be a sign that the company is not managing its resources efficiently, or that it is not selling its products or services as quickly as it could.<\/p>\n Option A is incorrect because having a low amount of working capital is not necessarily a good thing. A company needs to have enough working capital to meet its short-term obligations, such as paying its suppliers and employees. If a company has too little working capital, it may not be able to meet these obligations, which could lead to financial problems.<\/p>\n Option C is incorrect because sales are not the only factor that determines a company’s profitability. A company can have high sales but still be unprofitable if its costs are too high.<\/p>\n Option D is incorrect because a low turnover of working capital is not necessarily a good thing. A company needs to have a high enough turnover of working capital to generate enough sales to cover its costs and make a profit.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Having low amount of working capital” option2=”High turnover of working capital” option3=”Sales are less compared to assets employed” option4=”Low turnover of working capital” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-54358","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n