Mastering Cash Operating Cycles
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Questions and Answers

What is the industry average for the credit period taken from suppliers in days?

  • 53
  • 23
  • 70
  • 47 (correct)

What is the quick ratio for Topple Co in terms of liquid assets per $1 of current liabilities?

  • $1.43
  • $1.10
  • $6.30
  • $0.42 (correct)

What is the expected revenue generated by each $1 invested in working capital?

  • $6.30 (correct)
  • $1.43
  • $1.10
  • $70

What is the main cause of Topple Co's long working capital cycle?

<p>Slow inventory turnover (B)</p> Signup and view all the answers

What is the current ratio for Topple Co, and how does it compare to the industry average?

<p>$1.10 of current assets per $1 of current liabilities; it does not compare favorably with the industry average of 1.43 (B)</p> Signup and view all the answers

What is the significance of Topple Co paying its suppliers more quickly than the industry norm?

<p>It allows Topple Co to take advantage of settlement discounts offered by suppliers (B)</p> Signup and view all the answers

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