In general, the less net working capital a company has
A) the greater the risk.
B) the lower the risk.
C) the less likely creditors will lend to the firm.
D) the faster it will grow

Question

Quizplus · Accepted Answer

Net working capital (NWC) is a measure of a company's liquidity and ability to meet short-term obligations. A lower NWC indicates that a company may have difficulty paying its bills or meeting its financial obligations, which increases overall risk. A higher NWC typically indicates a company has more resources available to handle unexpected expenses or financial downturns, reducing overall risk. Therefore, the less net working capital a company has, the greater the risk.

In General, the Less Net Working Capital a Company Has