If current assets are 150,000 and current liabilities are 90,000, what is the working capital?

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Multiple Choice

If current assets are 150,000 and current liabilities are 90,000, what is the working capital?

Explanation:
Working capital measures liquidity by comparing what can be turned into cash within a year to what must be paid within the same period. It’s the net amount available to fund day-to-day operations. Here, current assets are 150,000 and current liabilities are 90,000. Subtracting gives 150,000 − 90,000 = 60,000. So the working capital is 60,000. A positive result like this means there’s extra short-term resources to cover obligations, unlike simply looking at total assets or total liabilities, or their sum.

Working capital measures liquidity by comparing what can be turned into cash within a year to what must be paid within the same period. It’s the net amount available to fund day-to-day operations.

Here, current assets are 150,000 and current liabilities are 90,000. Subtracting gives 150,000 − 90,000 = 60,000. So the working capital is 60,000. A positive result like this means there’s extra short-term resources to cover obligations, unlike simply looking at total assets or total liabilities, or their sum.

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