Asked by Aqualaquisha Lebron on Jul 15, 2024

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Net working capital is defined as:

A) current assets minus current liabilities.
B) working capital minus short-term debt.
C) current assets plus current liabilities.
D) All of the above

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.

Short-Term Debt

Financial obligations that are due for repayment within one year.

Current Liabilities

Obligations expected to require cash in less than one year, usually payables and accruals.

  • Pinpoint and explicate the constituents of net working capital.
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BJ
Brigham JacobsonJul 18, 2024
Final Answer :
A
Explanation :
Net working capital is simply the difference between current assets and current liabilities. Option A represents this accurately. Option B is incorrect, as it subtracts short-term debt from working capital instead of current liabilities. Option C is also incorrect, as it adds current liabilities to current assets instead of subtracting. Therefore, the correct answer is A - current assets minus current liabilities.