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)none of the above

Question

Quizplus · Accepted Answer

Net working capital is a measure of a company's liquidity and represents the amount of current assets minus current liabilities. The less net working capital a company has, the greater the risk because it may not have enough cash to cover short-term obligations or to invest in growth opportunities. This could lead to missed payments to suppliers or even bankruptcy, which makes the company riskier.

In General, the Less Net Working Capital a Company Has