Net Working Capital Is Defined as Current Assets Minus Current

question 174

True/False

Net working capital is defined as current assets minus current liabilities.This also defines the current ratio.

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Definitions:

Unfavourable

Describes an outcome or condition that is not beneficial or desired, often used in financial contexts to indicate underperformance.

Favourable

A term usually used in finance and accounting to refer to variances or differences that are beneficial to a company's financial health.

Flexible Budget Formula

A budget that adjusts to changes in the volume of activity, helping companies to better manage costs.

Fixed Overhead Costs

Expenses that do not change with the level of output within a certain range of activity, such as rent, salaries, and insurance.