The excess of current assets over current liabilities is
Answer Details
The excess of current assets over current liabilities is called working capital.
Current assets are the assets that can be easily converted into cash within a year, such as cash in hand, inventory, and accounts receivables. Current liabilities, on the other hand, are the short-term obligations that a company has to pay within a year, such as accounts payable and short-term loans.
Working capital is an important measure of a company's short-term financial health. If the current assets are greater than the current liabilities, it indicates that the company has sufficient funds to meet its short-term obligations. In other words, it has a positive working capital. On the other hand, if the current liabilities exceed the current assets, it indicates that the company may face liquidity issues and has a negative working capital.
In conclusion, working capital is the excess of current assets over current liabilities, and it indicates a company's ability to meet its short-term obligations.