Which of these is used in calculating working capital?
- furniture and fittings
-
stock of raw material
- machinery
- office equipment
The correct answer is: B
Explanation
Working capital is the measure of a company's short-term liquidity and its ability to cover its day-to-day operational expenses. It is calculated by subtracting current liabilities from current assets. Current assets include items that are expected to be converted into cash within one year or the operating cycle of the business, whichever is longer.