ECONOMICS

Detailed explanation-1: -Net current assets is the aggregate amount of all current assets, minus the aggregate amount of all current liabilities. There should be a positive amount of net current assets on hand, since this implies that there are sufficient current assets to pay for all current obligations.

Detailed explanation-2: -Net current liabilities refer to the current assets less current liabilities of an organisation. To have net current liabilities, the current liabilities must be larger than the current assets. This is usually because the company has very little inventories or does not give credit and therefore has no receivables.

Detailed explanation-3: -Current assets are short-term economic resources that are expected to be converted into cash or consumed within one year. Current assets include cash and cash equivalents, accounts receivable, inventory, and various prepaid expenses.

Detailed explanation-4: -Net current assets, also known as working capital, is an important financial metric when evaluating a company’s financial health.

Detailed explanation-5: -What is a current asset? A current asset-sometimes called a liquid asset-is a short-term asset that a company expects to use up, convert into cash, or sell within one fiscal year or operating cycle. Non-current assets, on the other hand, are long-term assets that cannot be readily converted into cash within one year.