A company having a current ratio of 1 will have ________ net working capital.
Correct answer: C. zero
- A. Positive
- B. Negative
- C. zero
- D. None of the given options
Explanation
A current ratio of 1 means current assets equal current liabilities. Since net working capital is current assets minus current liabilities, it is zero.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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