Current assets - Current Liabilities = ____________

Question

Quizplus · Accepted Answer

The formula given (Current assets - Current liabilities) calculates working capital, which is a measure of a company's ability to cover its short-term expenses. A higher working capital indicates that the company has more cash and/or other current assets on hand to cover current liabilities, which is generally seen as a positive sign of financial health. Choices A, B, and D all involve other ratios that are calculated differently, and do not directly relate to the given formula.

Current Assets - Current Liabilities = ____________