Asked by Erika Johnson on May 10, 2024
Verified
Net Working Capital:
A) r epresents the money required to support day-to-day activities.
B) is current assets minus current liabilities
C) is total assets minus total liabilities
D) Both A & B
E) Both A & C
Net Working Capital
Represents a measure of a firm's liquidity by calculating the excess of current assets over current liabilities, portraying the company's operational efficiency.
Current Assets
Assets owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle.
Current Liabilities
Short-term financial obligations that are due within one year, typically including accounts payable, short-term loans, and other debts.
- Comprehend the representation of a corporation's financial well-being through its financial statements, including aspects such as equity, net income, and net working capital.
Verified Answer
NK
nyaboga kiageMay 11, 2024
Final Answer :
D
Explanation :
Net working capital is defined as current assets minus current liabilities, which represents the money required to support day-to-day operational activities.
Learning Objectives
- Comprehend the representation of a corporation's financial well-being through its financial statements, including aspects such as equity, net income, and net working capital.