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CA Inter Working Capital — practice questions — page 2

Explore 62 free Working Capital questions in CA Inter Financial Management. Open each question or exercise to read its content, reference answers and available explanation.

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Working Capital questions and exercises with answers

Showing questions 31–60 of 62.

Which alternative name applies to the inventory conversion period?Read the answer and worked solution →Days sales outstanding is another name for which period?Read the answer and worked solution →Owing cash to disbursing cash is which conversion period?Read the answer and worked solution →How many of the four conversion cycles are needed to derive the fourth?Read the answer and worked solution →Each conversion interval is estimated using which relation?Read the answer and worked solution →In the CCC, the receivables conversion period uses which rate?Read the answer and worked solution →For inventory days in the CCC, which rate divides average stock?Read the answer and worked solution →A period's average level in the CCC is taken from which balances?Read the answer and worked solution →Why is the CCC derived from balance sheet data, not cash flows?Read the answer and worked solution →A firm holds stock 60 days, collects in 45 days and pays in 30 days. CCC?Read the answer and worked solution →A trader sells stock after 40 days, debtors pay after 30 days, suppliers are paid after 55 days. CCC?Read the answer and worked solution →Inventory is held 20 days, debtors pay in 10 days, creditors are paid in 50 days. The CCC isRead the answer and worked solution →Current assets are Rs 8.5 lakh and current liabilities Rs 5.2 lakh. NWC isRead the answer and worked solution →Average stock is Rs 90,000 and COGS Rs 5,40,000. On a 360-day year, stock days areRead the answer and worked solution →Debtors average Rs 1,20,000 and sales are Rs 9,60,000 a 360-day year. Debtor days?Read the answer and worked solution →The operating cycle is 105 days and the payables period 40 days. CCC isRead the answer and worked solution →The economic order quantity minimises which costs?Read the answer and worked solution →The basic EOQ model applies only when demand isRead the answer and worked solution →Which variable does not affect the optimal order quantity Q*?Read the answer and worked solution →Annual demand 2,400 units, ordering cost Rs 150, holding Rs 8 a unit. EOQ?Read the answer and worked solution →A firm needs 1,800 units a year, ordering costs Rs 50 and holding Rs 8 a unit. Orders a year at EOQ?Read the answer and worked solution →Demand 10,000 units, order cost Rs 40, annual holding cost Rs 5 a unit. EOQ?Read the answer and worked solution →With ordering and holding costs fixed, annual demand rises fourfold. EOQ becomesRead the answer and worked solution →Under an incremental discount, units 1-100 cost Rs 30, 101-199 cost Rs 28. Cost of 150 units?Read the answer and worked solution →Under an all-units discount, price is Rs 50 up to 1,000 units and Rs 45 for 1,001 to 5,000. Cost of 1,500 units?Read the answer and worked solution →Critics fault the EOQ model mainly for which weakness?Read the answer and worked solution →The bullwhip effect in supply chains refers to what?Read the answer and worked solution →Which inventory optimization models use probability distributions for variables?Read the answer and worked solution →Multi-echelon inventory optimization sets stock levelsRead the answer and worked solution →Why should companies keep inventory low when working capital is scarce?Read the answer and worked solution →

Worked practice questions

Which alternative name applies to the inventory conversion period?

  1. Days inventory outstanding
  2. Days cash outstanding
  3. Days sales outstanding
  4. Days payables outstanding
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Correct answer: A. Days inventory outstanding

The days stock stays on hand is also termed days inventory outstanding.

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Days sales outstanding is another name for which period?

  1. Payables conversion period
  2. Inventory conversion period
  3. Receivables conversion period
  4. Total operating cycle
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Correct answer: C. Receivables conversion period

The time from being owed cash to collecting it from debtors is the receivables period, or days sales outstanding.

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Owing cash to disbursing cash is which conversion period?

  1. Payables conversion period
  2. Operating cycle period
  3. Receivables conversion period
  4. Inventory conversion period
Show answer and solution

Correct answer: A. Payables conversion period

The gap between incurring a payable and actually paying it is the payables conversion period.

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More Financial Management topics

Sources of FinanceCost of Capital BasicsLeverage (Finance)Capital Structure BasicsDividend BasicsCapital Budgeting BasicsDividend PoliciesFinancial Management