Question

1.The cash needs of a business can be reduced by:

Increasing percentage change

Reducing days in inventory

Decreasing gross margin

Reducing inventory turnover

2.When growing a business, working capital will always increase when:

Gross margin increases

The efficiency ratios increase

Inventory turnover increases

Current assets increase more than current liabilities

Answer 1

  

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Answer 1)

The cash needs of a business can be reduced by Reducing days in inventory.

Option 2 is correct, .

Answer 2)

When growing a business, working capital will always increase when: Current assets increase more than current liabilities as the Working Capital = Current Assets - Current Liabilities. So as long as the Current Assets are increasing more than the current liabilities, the WC will increase.

Option 4 is correct.

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