Decrease in Working capital constitutes …………………
A)source of fund
B)application of funds
C)neither source nor application
D)none of these

Question

Quizplus · Accepted Answer

A decrease in working capital is considered a source of funds because it implies that the company is either increasing its current liabilities (which means more cash is coming in without an immediate cash outflow) or decreasing its current assets (which means cash is being freed up from those assets).

Decrease in Working Capital Constitutes …………………