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Home > Accounting > Question

What is Working Capital:

0
A) Current Assets - Current Liabilities
B) Total Assets - Total Liabilities
C) Fixed Assets - Current Liabilities
D) Current Liabilities - Current Assets

Correct Answer: A) Current Assets - Current Liabilities

• In financial accounting, Net Working Capital is precisely calculated as Current Assets - Current Liabilities. • It heavily represents a company's immediate operational liquidity and short-term Financial health. • Typical current assets strictly include liquid cash, inventory, and Accounts receivable. • Subtracting total liabilities from total assets gives the mathematical value of a company's Equity.

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