Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 13 - Financial Analysis: The Big Picture - Questions - Page 727: 13

Answer

Working Capital is the excess of current assets over current liabilities. Working capital = Current Assets – Current Liabilities. It is calculated by using the below formulae: Current Ratio= Current Assets/Current Liabilities

Work Step by Step

Current ratio is a measure to evaluate a company's liquidity and short term debt paying ability.
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