The term 'working capital' is used to describe the:
A) amount of equity (ownership) capital in the firm.
B) portion of capital actively employed in generating revenues.
C) amount of debt (borrowed) capital in the firm.
D) cushion of current assets over current liabilities.

Question

Quizplus · Accepted Answer

Working capital refers to the cushion of current assets over current liabilities, which represents the portion of capital actively employed in generating revenues. It does not include equity or debt capital.

The Term 'Working Capital' Is Used to Describe The