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Which of these is used in calculating working capital?

Commerce
JAMB 2024

Which of these is used in calculating working capital?

  • A. furniture and fittings
  • B. stock of raw material
  • C. machinery
  • D. office equipment
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Correct Answer: Option B
Explanation

Working capital is the measure of a company's short-term liquidity and its ability to cover its day-to-day operational expenses. It is calculated by subtracting current liabilities from current assets. Current assets include items that are expected to be converted into cash within one year or the operating cycle of the business, whichever is longer.


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