In general, the more 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)none of the above

Question

Quizplus · Accepted Answer

A company with higher net working capital generally means that it has more current assets than current liabilities. This indicates that the company has enough liquidity to meet its short-term obligations. Thus, creditors are more likely to lend to the firm, and it signifies a lower risk for the company.

In General, the More Net Working Capital a Company Has