Which of the following describes working capital?
A) Current assets minus merchandise inventory
B) Current assets minus current liabilities
C) Total debt minus stockholders' equity
D) Cost of goods sold divided by average merchandise inventory

Question

Quizplus · Accepted Answer

Working capital is the difference between a company's current assets (such as cash, accounts receivable, and inventory) and its current liabilities (such as accounts payable and short-term debt). Option B accurately describes this calculation.

Which of the Following Describes Working Capital