The excess of current assets over current liabilities is

The excess of current assets over current liabilities is known as working capital. Current assets are assets that can be easily converted into cash within a year, such as inventory, accounts receivable, and cash on hand. Current liabilities are debts that must be paid within a year, such as accounts payable, taxes owed, and short-term loans. Working capital is important because it represents the amount of funds that a company has available for day-to-day operations. If a company has more current assets than current liabilities, it has positive working capital. This means that it has sufficient funds to cover its short-term debts and can use the excess to invest in new opportunities or pay out dividends to shareholders. On the other hand, if a company has more current liabilities than current assets, it has negative working capital. This can indicate that the company is struggling to meet its short-term obligations and may need to take on additional debt to cover its expenses. In general, having positive working capital is seen as a positive sign for a company, as it suggests that it is financially stable and able to meet its obligations.