Working capital is equal to:
A) Current assets.
B) Current liabilities.
C) Current assets plus current liabilities.
D) Current assets minus current liabilities.

Question

Quizplus · Accepted Answer

Working capital is the difference between current assets and current liabilities. It represents the amount of funds a company has available for its day-to-day operations. Current assets are the assets that can be converted into cash within one year or the accounting period, while current liabilities are the obligations due within one year or the accounting period. Therefore, working capital is calculated as current assets minus current liabilities.

Working Capital Is Equal To