Asked by Benjamin Leonard on May 11, 2024
Verified
Dollar amounts of working capital are difficult to assess when comparing companies of different sizes or in comparing such amounts with industry figures.
Working Capital
the difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.
Industry Figures
Statistical data or benchmarks pertaining to a specific industry, used for comparison or analysis.
- Evaluate and interpret the working capital, current ratio, and grasp their influence on a corporation’s liquidity status.
Verified Answer
RK
Ritoug KelenjibashianMay 13, 2024
Final Answer :
True
Explanation :
Comparing dollar amounts of working capital without considering the size of the company or industry dynamics can be misleading and difficult.
Learning Objectives
- Evaluate and interpret the working capital, current ratio, and grasp their influence on a corporation’s liquidity status.