The primary objective of short-term financial management is to:
A) Find the optimal trade-off point between carrying costs and shortage costs.
B) Minimize the investment in net working capital.
C) Minimize the use of external financing.
D) Locate the source of financing that provides the lowest cost of capital.
E) Fund all company operations using long-term debt.

Question

Quizplus · Accepted Answer

The primary objective of short-term financial management is to efficiently manage the firm's current assets and liabilities to ensure liquidity and operational efficiency. This involves finding the optimal trade-off between carrying costs (costs of holding current assets) and shortage costs (costs of running out of current assets).

The Primary Objective of Short-Term Financial Management Is To