Which of the following is a measure of a company's ability to meet short-term obligations?
A) working capital
B) book value per share of common shares
C) accounts receivable turnover
D) debt ratio

Question

Quizplus · Accepted Answer

Working capital is a measure of a company's ability to meet short-term obligations (i.e. current liabilities) with its current assets. It is calculated by subtracting current liabilities from current assets. A positive working capital indicates that the company has enough current assets to meet short-term liabilities.

Which of the Following Is a Measure of a Company's