Ones corporation reported current assets of $195,000 and current liabilities of $138,000 on its most recent balance sheet, the working capital is $57000.
Working Capital = Current Assets - Current Liabilities
Working Capital = $195,000 - $138,000
Working Capital = $57000
Working Capital is a economic metric which represents operating liquidity available to a enterprise, company, or different entity, which includes governmental entities. along side constant property along with plant and system, running capital is considered a part of working capital.
What's Working capital and its instance?
In accounting, the working capital overall is generally derived from the figures for cutting-edge property and modern liabilities recorded at the stability sheet. as an example, a agency with $200,000 in current property and $100,000 in cutting-edge liabilities has working capital of $100,000.
What are the factors of working capital?
The requirement of working capital relies upon on the character of commercial enterprise. the character of enterprise is commonly of two kinds: production enterprise and buying and selling enterprise. Within the case of manufacturing enterprise it takes a lot of time in changing raw cloth into finished items.
What are the advantages of working capital?
One of the advantages of working capital is that you have extra flexibility, permitting you to meet your customers' orders, amplify your enterprise, and spend money on new services and products. It additionally presents a cushion for when your enterprise desires a bit of more money.
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