Working capital is a measure of a company's ability to pay its current obligations.

Name: Working capital is a measure of a company's ability to pay its current obligations.
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Question

Quizplus · Accepted Answer

Working capital is calculated by subtracting current liabilities from current assets and represents the amount of cash or easily convertible assets a company has to meet its short-term obligations. Therefore, it is a measure of a company's ability to pay its current obligations.

Working Capital Is a Measure of a Company's Ability to Pay