Working capital includes which of the following?

Working capital includes which of the following?

• A. Inventory
• B. Debtors
• C. Cash
• D. All of the above

Answer: (D)

Working capital reflects the funds a business has available for its day‑to‑day operations, basically its short‑term liquidity. It is tied up in current assets that can be converted to cash within a year, and those include cash itself, inventory, and trade debtors (receivables). Since each of these is a current asset used to run the business and meet short‑term obligations, all of them are part of working capital. That’s why the best choice is all of the above.

Working capital reflects the funds a business has available for its day‑to‑day operations, basically its short‑term liquidity. It is tied up in current assets that can be converted to cash within a year, and those include cash itself, inventory, and trade debtors (receivables). Since each of these is a current asset used to run the business and meet short‑term obligations, all of them are part of working capital. That’s why the best choice is all of the above.