The management of the firm's short-term assets and liabilities is called ___________ A. Financial risk management....

The management of the firm's short-term assets and liabilities is called ___________

A. Financial risk management.

B. Financial leverage management.

C. Working capital management.

D. Capital budgeting decision.

Solutions

Expert Solution

Net working capital = Current assets-Current liabilities

Both current assets and current liabilities form part of working capital. Working capital is adequately required for smoother production and functioning of operations. This process is called working capital management.

Hence, correct option is C. Working capital management.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Working capital management is the management of a firm’s short term assets and liabilities. It seems...

Working capital management is the management of a firm’s short term assets and liabilities. It seems like we hear more about a firm’s long-term strategies and plans when discussing their success or failure. Why is working capital management crucial to a firm’s success? What factors must the company consider when making working capital decisions?

A firm's long-term assets = $30,000, total assets = $310,000, inventory = $39,000 and current liabilities...

A firm's long-term assets = $30,000, total assets = $310,000, inventory = $39,000 and current liabilities = $20,000. What are the firm's current ratio and quick ratio?(Round your answer to 1 decimal place.) A) Current ratio = 16.5; quick ratio = 14.6 B) Current ratio = 24.0; quick ratio = 22.1 C) Current ratio = 19.0; quick ratio = 17.1 D) Current ratio = 14.0; quick ratio = 12.1

6. When short term liabilities exceed short term assets, what options are available to a going concern?

6. When short term liabilities exceed short term assets, what options are available to a going concern? 7.Depreciation and amortization are non-cash expenses that are deductible for tax purposes. In the extreme, as in some sports teams, why are these appealing to very rich individual investors? 8.In what way does equity represent a residual interest in the profits of a company? 9. Why is a high debt to equity ratio risky especially in a company with...

Short-term deferrals (prepaids and unearned revenues) are classified as current assets and current liabilities. As such,...

Short-term deferrals (prepaids and unearned revenues) are classified as current assets and current liabilities. As such, they are included in working capital. Required: Some argue that deferred liabilities will not be “paid”. 1) Why do accountants include short-term unearned revenues as current liabilities? Do they meet the definition of liabilities found in the conceptual framework? Do they affect working capital? Explain. 5 marks 2) Present arguments for excluding unearned revenues from current liabilities. Do they affect liquidity? Explain. 5 marks

Present current and long term assets and liabilities on a balance sheet (statement of financial position)...

Present current and long term assets and liabilities on a balance sheet (statement of financial position) including require disclosures. Please explain.

Define short-term management What are some strategies for effective short-term management

An event which impacts an organization and whose impact materializes immediately is called a: Short-term risk...

An event which impacts an organization and whose impact materializes immediately is called a: Short-term risk Medium-term risk Long-term risk Intolerable risk A Risk Map graphically describes risks by their: Magnitude and Tolerability Likelihood and Tolerability Magnitude and Likelihood Risk and Reward The management strategy for a Pure Risk is generally to: Mitigate it Manage it Avoid it Embrace it Which of the following is a benefit of Enterprise Risk Management? More efficient operations More effective processes More efficacious strategy...

Assets: $200 Reserves; $5000 Short term Bonds; $6000 Long Term Loans Liabilities: $7000 Checkable Deposits; $3000 Fixed...

Assets: $200 Reserves; $5000 Short term Bonds; $6000 Long Term Loans Liabilities: $7000 Checkable Deposits; $3000 Fixed Rate Borrowings; $1200 Capital What is the equity multiplier for this bank? Why would a bank want to increase its EM? Why would a bank decrease its EM?

What is a disbursement system, and why is it an important part of short-term financial management?...

What is a disbursement system, and why is it an important part of short-term financial management? What are the advantages of switching from decentralized to centralized disbursing? How are simple and complex disbursement systems different?? What is the benefit of a controlled disbursement account??

What is a disbursement system and why is it an important part of short-term financial management?...

What is a disbursement system and why is it an important part of short-term financial management? What are the advantages of switching from decentralized to centralized dibursing?

Subjects