Banking · Accounting Principles
The Working Capital of a firm is calculated as the difference between Current Assets and Current Liabilities. How is this metric directly linked to the Balance Sheet Equation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Working Capital = Fixed Assets - Long Term Liabilities
- 2Working Capital = Capital - Fixed Assets
- 3Working Capital = Capital + Long Term Liabilities - Fixed Assets✓
- 4Working Capital = Total Assets - Total Liabilities
Correct answer
Working Capital = Capital + Long Term Liabilities - Fixed Assets
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