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Question

The amount by which the value of current assets exceeds the value of current liabilities is ________________.

A
Gross working capital
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B
Net working capital
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C
Quick ratio
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D
Working capital ratio
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Solution

The correct option is B Net working capital
Net working capital (NWC) is the difference between a company's current assets and current liabilities. A positive net working capital indicates a company has sufficient funds to meet its current financial obligations and invest in other activities.

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