The difference between Current Assets of a firm and its Current Liabilities is called.
A) Net worth
B) Net working capital
C) Gross working capital
D) None of the above

Question

Quizplus · Accepted Answer

The difference between Current Assets and Current Liabilities of a firm is called Net Working Capital. It represents the firm's ability to meet its short-term obligations using its current assets. A positive net working capital indicates that the firm has enough current assets to meet its short-term liabilities, whereas a negative net working capital suggests that the firm may face difficulty in meeting its short-term obligations.

The Difference Between Current Assets of a Firm and Its