Working capital is defined as:
A)total assets less intangible assets.
B)current assets divided by current liabilities.
C)current assets less current liabilities.
D)total assets less current assets.
E)current assets less liabilities.

Question

Quizplus · Accepted Answer

Working capital is the difference between a company's current assets and its current liabilities. It represents the funds that a company has available to cover its short-term financial obligations. Option A refers to net assets, option B is the current ratio, option D is incorrect as it subtracts current assets twice, and option E is incomplete as it does not specify which type of liabilities are subtracted from current assets.

Working Capital Is Defined As