A firm's working capital is its ________.
A) inventory and accounts receivable minus its current liabilities
B) current assets minus its current liabilities
C) total assets minus its total liabilities
D) cash and cash equivalents minus its current liabilities
E) accounts receivable minus its total accounts payable

Question

Quizplus · Accepted Answer

Working capital is the difference between a firm's current assets and its current liabilities, representing the funds available for day-to-day operations. Option B) represents the correct formula for calculating working capital.

A Firm's Working Capital Is Its ________