Question

How does working capital affect the liquidity of a company?

Answer 1

Here is your answer ⤵⤵⤵⤵

Working capital of a business refers to the excess of current assets (such as cash in hand, debtors, stock, etc.) over current liabilities. Working capital affects both the liquidity as well as profitability of a business. As the amount of working capital increases, the liquidity of the business increases.

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