Net working capital, defined as current assets minus the sum of payables and accruals, is equal to the current ratio minus the quick ratio.

Name: Net working capital, defined as current assets minus the sum of payables and accruals, is equal to the current ratio minus the quick ratio.
Brand: Quizplus
Rating: 4.8 (27 reviews)

Question

Quizplus · Accepted Answer

Net working capital is equal to current assets minus current liabilities. The quick ratio is equal to (current assets - inventory) / current liabilities. Therefore, the formula given in the statement is incorrect.

Net Working Capital, Defined as Current Assets Minus the Sum