The management of the ﬁrm's short-term assets and liabilities is called:
A) Working capital management.
B) Financial depreciation.
C) Agency cost analysis.
D) Capital budgeting.
E) Capital structure.

Question

Quizplus · Accepted Answer

Working capital management involves managing a firm's short-term assets (such as inventory and accounts receivable) and liabilities (such as accounts payable and short-term loans) to ensure adequate cash flow and liquidity. This is an important aspect of overall financial management, but distinct from capital budgeting (which involves long-term investment decisions) and capital structure (which involves determining how to finance those investments). Financial depreciation and agency cost analysis are also related to financial management, but not specifically to working capital management.

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