Positive working capital for a firm implies that current assets are partially financed by long-term financing...

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Positive working capital for a firm implies that current assets are partially financed by long-term financing...

Positive working capital for a firm implies that

		current assets are partially financed by long-term financing
		fixed assets are partially financed by current liabilities
		current assets are completely financed by current liabilities
		firm has no short-term debt

business finance

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Answer 1

Answer #1

Ans current assets are partially financed by long-term financing

Positive working capital for a firm implies that current assets are partially financed by long-term financing.

When current assets are finance by long term financing, the current assets increases and long term liabilities increases. There is no impact on current liabilities. Therefore, current assets increase more than before. As a result Net working capital increases.

Working capital = Current assets - Current liabilities.

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Answer 2

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Positive working capital for a firm implies that current assets are partially financed by long-term financing...

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