What do you mean by the working-capital of an
organization??? How is it calculated????? Also Define the
importance of liquidity ratio along with its formula.
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Answer Posted / abdul rashid
Working capital is part of capital that is used for day to
day business requirement(short term). It is calculated by
deducting current liablities from current assests (Cureent
assests-current liabilities = WC).
Current assest divided by current liabilities refers to
liquidity ratio (CA/CL). It measures liquidity position of
an orgainisation.
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