Working capital equals:
A) noncurrent assets less noncurrent liabilities
B) cash on hand
C) current assets less current liabilities
D) shareholders' equity

Question

Quizplus · Accepted Answer

Working capital is defined as current assets minus current liabilities. This calculation shows a company's liquidity position and ability to meet its short-term liabilities with its current assets. Option A refers to the calculation of net noncurrent assets, which is not related to working capital. Option B refers only to cash on hand, and Option D refers to the residual claim of shareholders after all liabilities are paid off, which is not related to working capital.

Working Capital Equals