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Daniel Holmes
on Dec 01, 2024

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Working capital policy involves a tradeoff between easier operation and ____.

A) more working capital
B) spontaneous liabilities
C) temporary financing
D) the cost of carrying short-term assets

Working Capital Policy

A strategic approach to managing a company's short-term assets and liabilities to ensure it has sufficient liquidity to meet its short-term obligations.

Temporary Financing

Short-term loans or credit facilities intended to provide immediate liquidity or cover a short-term funding gap until long-term financing can be arranged.

Short-Term Assets

Assets expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

  • Understand the impact of decisions related to managing working capital on the liquidity of a company.
  • Examine the value of optimizing working capital.
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Ciara RamosDec 03, 2024
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