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

Question

Quizplus · Accepted Answer

Working capital is the difference between current assets and current liabilities. Current assets are those that are expected to be converted into cash within one year, while current liabilities are obligations that are due within one year. Therefore, working capital represents the amount of liquid resources that a company has available to meet its short-term obligations.

Working Capital Is Defined As