Which of the following accurately describes working capital?
A)Current assets minus inventory
B)Total debt minus shareholders' equity
C)Current assets minus current liabilities
D)Cost of sales divided by average inventory

Question

Quizplus · Accepted Answer

Working capital is calculated as the difference between a company's current assets and its current liabilities. It represents the resources that a company can use for its daily operations. Current assets include cash, accounts receivable, and inventory, while current liabilities include accounts payable and short-term debt. By subtracting the current liabilities from the current assets, we get the working capital.

Which of the Following Accurately Describes Working Capital