The difference between current assets and current liabilities is known as____________?
Correct answer: C. Working Capital
- A. Surplus Asset
- B. Short-term Ratio
- C. Working Capital
- D. Current Ratio
Explanation
Working capital equals current assets minus current liabilities, showing the short-term funds available for day-to-day operations. The current ratio is a division of these figures, not their difference.
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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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