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

Question

Quizplus · Accepted Answer

Working capital is the difference between current assets and current liabilities. It is important because it represents the resources available to a company to fund its day-to-day operations. Option A is the formula for the current ratio, while option B is the formula for total equity. Option D is not a relevant formula for calculating working capital.

Working Capital Is Defined As