Working capital equals:
ATotal assets − total liabilities
BCurrent assets − current liabilitiesCORRECT
CCash only
DLong-term debt
CFACorporate Finance
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
Working capital measures short-term liquidity = CA − CL. Positive is generally healthy.
Want this in Pidgin, Yoruba, Igbo or Hausa? Sign up free →
Practice more Corporate Finance questions
CFA Corporate Finance has thousands more questions like this — with Worked answers on every one.