Which of the Following Calculates Working Capital

question 52

Multiple Choice

Which of the following calculates working capital?

• A) current assets divided by current liabilities
• B) total assets minus total liabilities
• C) current assets minus current liabilities
• D) current assets plus current liabilities

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Definitions:

Cost of Borrowing

The total charges, including interest and any other fees, that a borrower pays to secure and use borrowed money.

Acid-Test Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Working Capital

Current assets less current liabilities.

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.