A firm's short-term assets and its short-term liabilities are referred to as the firm's:
A) working capital.
B) debt.
C) investment capital.
D) net capital.
E) capital structure.

Question

Quizplus · Accepted Answer

Working capital is defined as the difference between a firm's current assets and current liabilities. Current assets and current liabilities are both short-term in nature, meaning they are expected to be converted to cash or paid off within one year. Therefore, the best choice is A) working capital.

A Firm's Short-Term Assets and Its Short-Term Liabilities Are Referred