Question

What is key to sound working capital management?

Options

• Buying new machines, new fixed assets, opening new branches

• Evaluating investment amount and interest rate

• Efficient management of cash, inventory, and receivables

• Choosing the project with the higher rate of return

Answer 1

Efficient management of cash, inventory, and receivables is key to sound working capital management. These activities help manage the firm's liquidity and profitability.