What is the working capital for a company with current assets of $90,000 and current liabilities of $26,500?

What is the working capital for a company with current assets of $90,000 and current liabilities of $26,500?

• A. $63,500
• B. $70,000
• C. $50,000
• D. $80,000

Answer: (A)

The working capital of a company is calculated by subtracting current liabilities from current assets. In this case, the company has current assets totaling $90,000 and current liabilities amounting to $26,500. To determine the working capital, the calculation is as follows: Working Capital = Current Assets - Current Liabilities Working Capital = $90,000 - $26,500 Working Capital = $63,500 This result indicates that the company has $63,500 of working capital, which is a positive sign. Positive working capital suggests that the company has sufficient short-term assets to cover its short-term liabilities, which is crucial for maintaining operational liquidity and financial health. Understanding the implications of working capital is essential, as it impacts a company's ability to meet its obligations, invest in future opportunities, and manage day-to-day operations efficiently. Thus, the correct answer reflects the accurate calculation of working capital, indicating a financially stable position for the company.

The working capital of a company is calculated by subtracting current liabilities from current assets. In this case, the company has current assets totaling $90,000 and current liabilities amounting to $26,500.

To determine the working capital, the calculation is as follows:

Working Capital = Current Assets - Current Liabilities

Working Capital = $90,000 - $26,500

Working Capital = $63,500

This result indicates that the company has $63,500 of working capital, which is a positive sign. Positive working capital suggests that the company has sufficient short-term assets to cover its short-term liabilities, which is crucial for maintaining operational liquidity and financial health.

Understanding the implications of working capital is essential, as it impacts a company's ability to meet its obligations, invest in future opportunities, and manage day-to-day operations efficiently. Thus, the correct answer reflects the accurate calculation of working capital, indicating a financially stable position for the company.