Question

The Working Capital (or Net Current Assets) of a business is_____________.

• A. Current assets less current liabilities
• B. Capital plus liabilities which are not expected to be paid within a year of the balance sheet date
• C. The capital introduced by the proprietor at commencement of business
• D. Non current assets plus current assets less current liabilities,

Answer 1

Answer: (A)

Current assets less current liabilities

Working capital is a common measure of a company's liquidity, efficiency, and overall health.

The formula for working capital is:

Current Assets - Current Liabilities