Asked by Huyen Nguyen on May 26, 2024
Verified
The excess of current assets over current liabilities is referred to as working capital.
Working Capital
The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.
Current Assets
Resources anticipated to be turned into cash, sold off, or used up within a year or over the course of the operational cycle, depending on which period extends further.
- Become familiar with the idea of working capital and its relevance to short-term financial scrutiny.
Verified Answer
DS
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Final Answer :
True
Explanation :
This statement is true. Working capital represents the amount of money a company has to fund its day-to-day operations and is calculated by subtracting current liabilities from current assets. If the result is positive, then the company has working capital.
Learning Objectives
- Become familiar with the idea of working capital and its relevance to short-term financial scrutiny.
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