____________ refers to the difference between a ﬁrm's current assets and its current liabilities.
A) Operating cash ﬂow
B) Capital spending
C) Net working capital
D) Cash ﬂow from assets
E) Cash ﬂow to creditors

Question

Quizplus · Accepted Answer

Net working capital is calculated by subtracting a firm's current liabilities from its current assets. It measures a company's liquidity and ability to meet short-term obligations. A positive net working capital indicates that a firm has enough current assets to pay off its current liabilities. A negative net working capital means that a firm may have difficulty meeting its short-term obligations.

____________ Refers to the Difference Between a ﬁRm's Current Assets