Working capital is a measure of
A) Financial flexibility
B) Liquidity.
C) Profitability.
D) Solvency.

Question

Quizplus · Accepted Answer

Working capital is a measure of liquidity. It represents a company's ability to meet its short-term obligations using its current assets. It is calculated by subtracting current liabilities from current assets. A positive number indicates that a company has enough current assets to cover its current liabilities, which means it has good liquidity.

Working Capital Is a Measure of