Which of the following describes net working capital?

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. This reflects the liquidity position of a company and its ability to meet short-term obligations. Option B is incorrect because it subtracts only inventory from current assets instead of all current liabilities, while option C is incorrect because it only subtracts cash from current assets. Option D subtracts long-term liabilities from current assets, which is not the correct formula for net working capital.

Which of the Following Describes Net Working Capital