The excess of current assets over current liabilities is called:
A)Current ratio.
B)Working capital.
C)Debt ratio.
D)Quick ratio.

Question

Quizplus · Accepted Answer

Working capital is the excess of current assets over current liabilities. It represents the liquidity position of the business and its ability to meet short-term obligations. The other options do not accurately describe working capital. Current ratio is the ratio of current assets to current liabilities, debt ratio is the ratio of debt to total assets, and quick ratio is the ratio of quick assets (current assets minus inventory) to current liabilities.

The Excess of Current Assets Over Current Liabilities Is Called