Current asset=160, current libility=100, what is the working capital?

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BlackTom AI · Accepted Answer

To assess working capital, we start with the basic formula: Working Capital = Current Assets − Current Liabilities.
Option 1: 60. This matches the calculation since 160 − 100 = 60, so it correctly represents the net short-term resources available.
Option 2: 160. This would be the entire current assets amount, not the net amount after subtracting current liabilities, so it overstates working capital.
Option 3: 50. This value would suggest subtracting 110 from 160, which would imply liabilities of 110, but the provided current liabilities are 100, making this incorrect given the data.
Option 4: 100. This equals the current liabilities themselves, not the difference between assets and liabilities, so it does not reflect actual working capital.
Overall, the correct interpretation is that working capital equals 60, derived from 160 minus 100, reflecting the net short-term funds available after covering current obligations.

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Current asset=160, current libility=100, what is the working capital?

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