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Commerce · Q502

Financial Management

Graduate and Post Graduate · Commerce · question 502

Q502

Required increasing in current assets and an increasing in current liabilities is subtracted to calculate

A.
change in net working capital
Answer
B.
change in current assets
C.
change in current liabilities
D.
change in depreciation

Answer: Option A

Solution

Answer: Option A
Solution:
Net working capital is the aggregate amount of all current assets and current liabilities. It is used to measure the short-term liquidity of a business, and can also be used to obtain a general impression of the ability of company management to utilize assets in an efficient manner.