Question : Working capital is the difference between
Option 1: Total debt and long term debt
Option 2: Liquid assets and current liabilities
Option 3: Current assets and current liabilities
Option 4: Total assets and current liabilities
Answer (1)
22nd Jan, 2024
Correct Answer: Current assets and current liabilities
Solution :
Answer = Current assets and current liabilities
Working capital is the difference between a company's current assets (such as cash, accounts receivable, and inventory) and its current liabilities (such as accounts payable and short-term debt). It represents the amount of funds available for day-to-day operations.
Working capital = current assets – current liabilities.
Hence, the correct option is 3.
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