Working capital management
A)deals with assigning cash values to employees.
B)is not important to small businesses.
C)involves managing short-term assets and sources of financing.
D)involves managing long-term assets and liabilities.

Question

Quizplus · Accepted Answer

Working capital management involves managing short-term assets (such as inventory and accounts receivable) and sources of financing (such as short-term loans and trade credit) to ensure that a business has enough liquidity to meet its operational needs. It is important for all businesses, regardless of size. Option A is incorrect, as assigning cash values to employees is typically handled by the human resources department. Option D is incorrect, as long-term assets and liabilities are typically managed in the context of capital budgeting and financial structuring, which are separate from working capital management.

Working Capital Management