The objective of managing current assets and liabilities is to
A)achieve as low a level of current assets as possible.
B)achieve as low a level of current liabilities as possible.
C)achieve a balance between profitability and risk that contributes to the firm's value.
D)achieve as high a level of current liabilities as possible.
E)none of the above

Question

Quizplus · Accepted Answer

The objective of managing current assets and liabilities is to achieve a balance between profitability and risk that contributes to the firm's value. This involves ensuring that the company has enough current assets to meet its operational needs but not so much that it ties up unnecessary capital. Similarly, the company should aim to have a manageable level of current liabilities that can be comfortably serviced without affecting its financial stability. Ultimately, the goal is to optimize the use of these resources in a way that enhances the company's profitability and value.

The Objective of Managing Current Assets and Liabilities Is to