Asked by Jesica Alarcon on Jun 14, 2024
Verified
Short-term debt is most often used by a business for working capital and is repaid out of the proceeds of its sales.
Working Capital
The difference between a company's current assets and current liabilities, indicating the liquidity available to run its day-to-day operations.
Short-Term Debt
Financial obligations due within one year, used by companies for immediate financing needs.
- Absorb the terminology and conceptual framework tied to the financing sequence and architecture in startup ventures.
Verified Answer
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Angela DicksonJun 18, 2024
Final Answer :
True
Explanation :
Short-term debt, also known as current liabilities or short-term liabilities, is often used by businesses to finance day-to-day operations and cover expenses such as salaries, rent, and inventory. This type of debt is typically repaid from the company's cash flow, which is generated through sales and collections from customers.
Learning Objectives
- Absorb the terminology and conceptual framework tied to the financing sequence and architecture in startup ventures.
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