Net working capital is defined as:
A)the current assets in a business.
B)the difference between current assets and current liabilities.
C)the present value of short-term cash flows.
D)the difference between all assets and liabilities.
E)None of the above.

Question

Quizplus · Accepted Answer

Net working capital is defined as the difference between a company's current assets (like cash, inventory, accounts receivable) and its current liabilities (like accounts payable, short-term loans). It represents the amount of capital a company has available for day-to-day operations. The formula for net working capital is: Net Working Capital = Current Assets - Current Liabilities. Therefore, option B is the correct answer.

Net Working Capital Is Defined As