Q113
Which of the following is a basic principle of finance as it relates to the management of working capital?
A.
Profitability varies inversely with risk
B.
Liquidity moves together with risk
C.
Profitability moves together with risk
AnswerD.
Profitability moves together with liquidity
Answer: Option C
Solution
Answer: Option C
Solution:
Profitability moves together with risk is a basic principle of finance as it relates to the management of working capital. Profitability is ability of a company to use its resources to generate revenues in excess of its expenses.