Which of the following is the difference between a firm's current assets and current liabilities?
A)net present value
B)net income
C)net worth
D)net working capital

Question

Quizplus · Accepted Answer

The difference between a firm's current assets (such as cash, inventory, and accounts receivable) and current liabilities (such as accounts payable and short-term debt) is referred to as net working capital. This measure represents the amount of funds that a firm has available to meet its short-term obligations and fund its daily operations. By tracking changes in net working capital over time, managers can gain insights into a firm's liquidity and ability to manage its cash flows effectively.

Which of the Following Is the Difference Between a Firm's