Working capital is calculated as:

Question

Quizplus · Accepted Answer

Working capital is calculated as current assets minus current liabilities, as it represents the company's ability to finance its day-to-day operations. Current assets include cash, accounts receivable, inventory, while current liabilities include accounts payable, short-term loans, and accrued expenses. Subtracting current liabilities from current assets gives a measure of how much liquid assets a company has available to meet its short-term obligations.

Working Capital Is Calculated As