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A firm's short-term assets and its short-term liabilities are referred to as the firm's:________

Sagot :

asarwar

Working capital is the firm's short-term liabilities and short-term assets. The right fill-in-the-blank option to this question is working capital.

Short term assets and short term liabilities of a firm are known as the firm's working capital. Working capital is basically calculated when we subtract current liabilities from current assets in the balance sheet. Current assets include cash, accounts receivable and closing inventory. Current liabilities include payable, taxes, wages and outstanding expenses.

If working capital is positive it means the company can pay its bills and invest for business growth. Working capital management ensures that the company can meet day-to-day operating expenses while using its financial resources in the most productive way.

Working capital calculation helps a business to plan for future needs and ensure that it has enough cash and cash equivalents meet short-term obligations e.g short-term debt.

Therefore, working capital is the firm's short-term obligations and short-term assets.

You can learn more about working capital at

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