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a. The company's working capital would be positive.
b. The company's working capital would be zero.
c. The company's working capital would be negative.
d. The company's working capital would be2:1.
c. The company's working capital would be negative.
The Answer is C, Working Capital would be Negative because
the Current Assets (CA) will be half of the Current Liabilities (CL) which will make the Calculation of Working Capital which is = CA - CL as Negative.
Also the Working Cap would be 1:2 instead of 2:1 which is given in option d.
c.The company's working capital would be negative.
current ratio = current assets / current liabilities = 0.5
this means that current liabilities = 2 current assets.>>>>>1
working capital = current assets - current liabilities >>>>>>2
if we take out current liabilities from eq.2 and put its value from eq.1 which is 2 current assets.
the working capital will be = current assets - 2 current assets = -1 current assets
so the working capital is negative
It is assumed that current ratio standard is 2:1 so if the current ratio is zero point five then the working capital is negative so the answer is C.
The company's working capital would be negative. As the current ratio denotes the number of times the current liabilities will be met with available current assets. Having 0.5 times as current ratio mentions that the total current liabilities exceed the total current assets
The working capital is = CA-CL
the CurrntRATIO = CA/CL
the answer is 0.5
Which mean current liability is higher than curent asset the answer C negative
The answer is C. ( company's working capital would be negative ) as the current assets to current liabilities is 0:.5. A healthy current ratio must be 2:1 or at least 1:1. However, here current asset is zero and current liabilities .5. It is a very adverse capital situation where company must be running at a debt capital than equity capital.
Answe is C
Company only have half (0.5) of the cash or Cash equivalat for the total current liablity.
The answer is: (C)The working capital would be negative.
The correct answer is C.......................
When the current ratio is .5, it means that the company has twice the as many current liabilities as current assets, thus working capital is a negative amount . So "C" is the correct answer.
