alleryStart learning →Working capital management is said to reduce the risk of:
AIllumination
BIllegibility
CIlliquidity
DIllustration
Answer & Solution
Correct answer: C. Illiquidity
1. The danger being managed is running out of cash to pay bills.
2. That danger has a single name in finance.
3. Working capital management mitigates the risk of illiquidity.
4. It also helps the company run smoothly.
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 19 'The Importance of Trade Credit and Working Capital in Planning', sections 19.1-19.5_
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