Which of the following formulas represents working capital?
A) current assets - current liabilities
B) quick assets - current liabilities
C) current assets ¸ current liabilities
D) quick assets ¸ current liabilities

Question

Quizplus · Accepted Answer

Working capital is calculated by subtracting current liabilities from current assets. This formula helps determine the amount of funds a company has available for its day-to-day operations. Option B would represent the quick ratio, which is a different financial measurement. Option C and D are incorrect because working capital is not calculated using a division formula.

Which of the Following Formulas Represents Working Capital