Working capital is defined as:
A)Current assets divided by current liabilities.
B)Total assets minus total liabilities.
C)Current assets minus current liabilities.
D)Current liabilities divided by total liabilities.

Question

Quizplus · Accepted Answer

Working capital is the difference between current assets (such as cash, inventory, and accounts receivable) and current liabilities (such as accounts payable and short-term debt). Therefore, the correct formula is C) Current assets minus current liabilities.

Working Capital Is Defined As