Current assets are subtracted from current liabilities to calculate

A. opportunity cost of capital

B. working capital

C. total long term assets

D. weighted average cost of capital

Answer: Option B

Solution(By Examveda Team)

Current assets are subtracted from current liabilities to calculate working capital. Working capital, also known as net working capital (NWC), is the difference between a company's current assets, such as cash, accounts receivable (customers' unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable.