The management of a ﬁrm's short-term assets and liabilities is called:
A) Working capital management.
B) Debt management.
C) Equity management.
D) Capital budgeting.
E) Capital structure.

Question

Quizplus · Accepted Answer

Working capital management involves the management of a firm's short-term assets (such as inventory, accounts receivable, and cash) and liabilities (such as accounts payable and short-term debt) to ensure that the firm has enough liquidity to operate on a day-to-day basis. This involves managing cash flows, credit policies, inventory levels, and other aspects of a company's short-term financial position. Debt management, equity management, capital budgeting, and capital structure relate to longer-term financial decisions and are not directly related to the day-to-day management of a firm's working capital.

The Management of a ﬁRm's Short-Term Assets and Liabilities Is