Net working capital is a measure of the company's:

Question

Quizplus · Accepted Answer

Net working capital measures a company's estimated liquidity, which is the ability to meet short-term financial obligations with available assets. It is calculated as the difference between current assets (such as cash, inventory and accounts receivable) and current liabilities (such as accounts payable and short-term debt). Goodwill and shareholders' equity are measures of long-term value, while short-term liabilities are only one component of net working capital.

Net Working Capital Is a Measure of the Company's