156k views
1 vote
Working capital management includes decisions concerning which of the following?

I. trade payables
Il. long-term debt
III.trade receivables
IV. inventory
A. II and III only
B. I and II only
C. III, and IV only.
D. I and Ill only
E. II and IV only.

User Verendus
by
9.5k points

1 Answer

1 vote

Final answer:

Working capital management entails decisions related to trade payables, trade receivables, and inventory. It does not typically include long-term debts, which are associated with financing long-term investments.

Step-by-step explanation:

Working capital management includes decisions concerning items that affect the day-to-day liquidity requirements of a firm. These items typically involve current assets and current liabilities, which are essential for maintaining the operations of a firm. Therefore, working capital management encompasses decisions involving trade payables (I), trade receivables (III), and inventory (IV). Long-term debt (II) falls outside the scope of working capital management because it pertains to the financing of long-term investments, which are not part of the day-to-day operational liquidity. Hence, the correct answer to the question is 'C. III and IV only.'

User Asportnoy
by
7.7k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.