Net working capital is computed as __________ .
Answer & explanation
Correct answer: option 4
The correct answer is option (4)- Current assets - Current liabilities.
Net working capital is computed as Current assets - Current liabilities.
Net working capital represents the difference between a company's current assets (such as cash, accounts receivable, and inventory) and its current liabilities (such as accounts payable and short-term debt). It provides insight into a company's short-term liquidity and its ability to meet its short term financial obligations.