The Objective of Managing Current Assets and Liabilities Is to

question 103

Multiple Choice

The objective of managing current assets and liabilities is to

• A)achieve as low a level of current assets as possible.
• B)achieve as low a level of current liabilities as possible.
• C)achieve a balance between profitability and risk that detracts from the firm's value.
• D)achieve as high a level of current liabilities as possible.
• E)none of the above

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Definitions:

Cash Investments

Money put into financial instruments or assets with the expectation of achieving a profit.

Statement of Cash Flows

A financial report that details the inflows and outflows of cash for a business over a specific period, highlighting operations, investing, and financing activities.

Financing Activities

Transactions related to raising, repaying, or managing the long-term capital and funding of an entity, reflected in the cash flow statement.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.