Working capital management focuses on which type of assets?

Working capital management is centered on managing a company's current assets and current liabilities to ensure operational efficiency and liquidity. Current assets include cash, accounts receivable, and inventory, which are crucial for day-to-day operations. The goal of working capital management is to maintain adequate levels of current assets to meet short-term obligations and to optimize the use of these assets for operational needs.

Focusing on current assets allows a business to ensure that it can cover its short-term debts and operating expenses while also investing in growth opportunities. By effectively managing these assets, a company can improve cash flow, reduce financial stress, and maximize profitability.

In contrast, long-term fixed assets pertain to investments intended for extended use and are not the primary concern of working capital management. Intangible assets, like patents and trademarks, also do not directly impact day-to-day liquidity and operational cash flow, while debt obligations relate to liabilities rather than the assets being managed. Therefore, current assets are the correct focus of working capital management, as they directly influence the company’s ability to meet its immediate financial requirements.