Net working capital (NWC) is calculated as:
A) Total assets-total liabilities
B) Current assets + current liabilities
C) Current assets-current liabilities
D) None of the above

Question

Quizplus · Accepted Answer

NWC is calculated as current assets minus current liabilities. This represents the amount of assets that are able to be used for operational purposes after all short-term liabilities are paid off. Option A includes both long-term and short-term assets and liabilities, which is not accurate. Option B adds together current assets and liabilities, which does not reflect the net balance of usable assets. Option D is incorrect as the correct answer is C.

Net Working Capital (NWC) Is Calculated As