alleryStart learning →Working capital bingo
Exercise and reference answers
- Clues and terms
- Clue
- The same thing as the current assets of the firm.
- Item
- Gross WC
- Clue
- Current assets after the current liabilities are taken off.
- Item
- Net WC
- Clue
- Credit a vendor grants to a creditworthy buyer.
- Item
- Trade credit
- Clue
- Payment due in full within thirty days of the invoice.
- Item
- Net 30
- Clue
- The liquidity ratio that leaves inventory out.
- Item
- Quick ratio
- Clue
- Current assets measured against current liabilities.
- Item
- Current ratio
- Clue
- The risk that working capital management sets out to reduce.
- Item
- Illiquidity
- Clue
- A current asset that must be sold before it becomes cash.
- Item
- Inventory
- Clue
- An item that never becomes cash and cannot pay bills.
- Item
- Prepaid
- Instructions
- Read each clue and tap the term it describes.
Explanation
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 19 'The Importance of Trade Credit and Working Capital in Planning', sections 19.1-19.5_