Explore Westonci.ca, the top Q&A platform where your questions are answered by professionals and enthusiasts alike. Get immediate and reliable solutions to your questions from a knowledgeable community of professionals on our platform. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.
Sagot :
An increase in current liabilities decreases net working capital, thereby increases the risk of technical insolvency. Thus the option (B) is correct.
What is Working Capital?
Working capital refers to the current assets minus current liability. It tells about company's day to day operation and indicates about financial capacity to pay its debt within a year.
Increase in the current liabilities implies that there is a decrease in working capital. Therefore, it implies that company has increased its debt which can result in the risk insolvency.
Thus the option (B) is correct.
Learn more about Working capital here:
https://brainly.com/question/13126692
#SPJ1
We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.
