Q1. Explain how rapidly expanding sales can drain the cash resources of a firm.
Q2. What is the significance to working capital management of matching sales and production?
Q3. A firm that uses short-term financing methods for a portion of permanent current assets is assuming more risk but expects higher returns than a firm with a normal financing plan. Explain.
Q4. Since the mid-1960s, corporate liquidity has been declining. What reasons can you give for this trend?