Which of the following is working capital?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Money.
- Working capital is a financial metric that represents operating liquidity available to an entity.
- The capital of a business which is used in its day-to-day trading operations is calculated as the current assets minus the current liabilities.
- Working capital is the money used to cover all of a company's short-term expenses, which are due within one year.
- Fixed capital is any kind of real, physical asset that is used repeatedly in the production of a product. For example Buildings, plants, machinery, vehicles, equipment, etc.