BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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total assets minus fixed assets.
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current assets minus current liabilities.
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current assetsets minus inventories.
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current assets
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Detailed explanation-1: -Working capital, also known as net working capital (NWC), is the difference between a company’s current assets-such as cash, accounts receivable/customers’ unpaid bills, and inventories of raw materials and finished goods-and its current liabilities, such as accounts payable and debts.
Detailed explanation-2: -Net working capital, also called NWC or working capital, measures a company’s short-term financial health. NWC shows the difference between a company’s current assets and current liabilities, and the remaining dollar amount is the company’s working capital for the immediate future.
Detailed explanation-3: -Net working capital = current assets (less cash) – current liabilities (less debt) Here, current assets (CA) = The sum of all short-term assets that are easily convertible into cash like accounts receivable, debts owed to the company, etc. It also includes available cash.
Detailed explanation-4: -Working capital is the difference between a company’s current assets and current liabilities. It is a financial measure, which calculates whether a company has enough liquid assets to pay its bills that will be due within a year.