Management of working capital is important because it affects the firm's:
A)profitability.
B)risk.
C)liquidity.
D)all of the above.

Question

Quizplus · Accepted Answer

The management of working capital affects all three factors mentioned in the options - profitability, risk, and liquidity. Poor management of working capital can result in lower profitability due to increased financing costs or lost sales opportunities. It can increase risk by leading to cash flow problems or defaults on payments. And it can impact liquidity by tying up too much cash in inventory, receivables, or other working capital components. Therefore, it is important to manage working capital effectively to achieve financial success.

Management of Working Capital Is Important Because It Affects the Firm's