BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Net Working Capital =
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Current Assets ____ Current Liabilities
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All Assets ____ All Liabilities
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Current Liabilities ____ Current Assets
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All Liabilities ____ All Asset
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Explanation:
Detailed explanation-1: -Simply put, Net Working Capital (NWC) is the difference between a company’s current assets and current liabilities on its balance sheet. It is a measure of a company’s liquidity and its ability to meet short-term obligations, as well as fund operations of the business.
Detailed explanation-2: -Working capital is calculated by taking a company’s current assets and deducting current liabilities. For instance, if a company has current assets of $100, 000 and current liabilities of $80, 000, then its working capital would be $20, 000.
Detailed explanation-3: -Working capital is calculated as current assets minus current liabilities, as detailed on the balance sheet.
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