For a quick check of a firm's short-term financial health, examine its:
A) working capital.
B) gross margin.
C) long-term debt.
D) cost of sales.

Question

Quizplus · Accepted Answer

Working capital is a measure of a firm's liquidity and ability to meet short-term obligations. A higher working capital indicates that the company has more current assets than current liabilities, which can cover short-term financial obligations. Gross margin, long-term debt, and cost of sales are not specifically indicative of short-term financial health.

For a Quick Check of a Firm's Short-Term Financial Health