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      Question

      Using the same data, what is the Long Term Funds to

      Fixed Assets position?
      A Adequate margin for WC Correct Answer Incorrect Answer
      B Partial diversion of WC Correct Answer Incorrect Answer
      C Complete diversion of WC Correct Answer Incorrect Answer
      D Excess idle funds Correct Answer Incorrect Answer
      E Negative net worth Correct Answer Incorrect Answer

      Solution

      Long Term Funds = Equity + Reserves + Term Loan = 60 + 40 + 120 = 220 Fixed Assets = 180 β†’ surplus 40 for WC, healthy.

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