Practicing Success
Higher working capital usually results in: |
Higher equity, lower risk, and lower profits Lower current ratio, higher risk, and profits Lower equity, lower risk, and higher profits Higher current ratio, higher risk, and higher profits |
Higher current ratio, higher risk, and higher profits |
A higher working capital means more funds are required to meet the short term needs. This will be result in more current assets which will mean higher current ratio. Thus, option 4 is correct. |