Which one of the following statements concerning net working capital is correct?
A) Net working capital is negative when current assets exceed current liabilities.
B) Net working capital includes cash, accounts receivables, fixed assets, and accounts payable.
C) Inventory is a part of net working capital.
D) The change in net working capital is equal to the beginning net working capital minus the ending net working capital.
E) Net working capital includes accounts from the statement of comprehensive income.

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities, and inventory is considered a part of current assets, thus it is included in the calculation of net working capital.

Which One of the Following Statements Concerning Net Working Capital