Examveda
Examveda

Negative net working capital means assets are not being used effectively, and a company may face a liquidity crisis. This implies

A. Long-term funds have been used for fixed assets

B. Short-term funds have been used for fixed assets

C. Long-term funds have been used for current assets

D. Short-term funds have been used for current assets

Answer: Option B


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Related Questions on Business Finance

Match List-I with List-II and select the correct answer:

List-I List-II
a. Modigliani Miller approach 1. Commercial papers
b. Net operating income approach 2. Working capital management
c. Short-term money market instrument 3. Capital structure
d. Factoring 4. Arbitrage

A. a-4, b-3, c-1, d-2

B. a-3, b-4, c-1, d-2

C. a-2, b-3, c-1, d-4

D. a-3, b-2, c-4, d-1