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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 / hpotter1987
working capital is that part of capital which is used for
day to day oerations like payment of wages various day to
day bills. it is excess of current assets over the current
liabilities.
liquid ratio is the ration of liquid assets to the liquid
liabilities where liquid assets = CA - closing Stock
and liquid liabilities = CL - Bank Overdraft
(refer book jayant mitra for cost and management acoounting)
| Is This Answer Correct ? | 12 Yes | 7 No |
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