Use the information below to answer question .Statement of assets and liabilities as at 31st December, 2001.Shareholders' interest ₦240 Current liabilities ...

Use the information below to answer question .Statement of assets and liabilities as at 31st December, 2001.Shareholders' interest ₦240 Current liabilities ₦20 Current assets ₦110Fixed assets ₦140

What is the networking capital?

Answer Details

The networking capital of a business is the difference between its current assets and current liabilities. In this case, the current assets are ₦110 and the current liabilities are ₦20. Therefore, the networking capital is ₦90m (₦110m - ₦20m). The networking capital is an important measure of a company's liquidity and ability to pay its short-term obligations.