Net operating working capital,defined as operating current assets minus the difference between current liabilities and notes payable,is equal to the current ratio minus the quick ratio.

Question

Quizplus · Accepted Answer

Net operating working capital is calculated as operating current assets minus operating current liabilities (excluding notes payable), which is not directly related to the difference between the current ratio and the quick ratio. The current ratio and quick ratio are liquidity ratios that measure a company's ability to meet short-term obligations, but they do not directly calculate net operating working capital.

Net Operating Working Capital,defined as Operating Current Assets Minus the Difference