Net current assets is the excess of total current assets over total current liabilities. It is also called working capital. To find net current assets is more important to know just total current assets because we can use only net current assets for ourbusiness's day to day activities. It is very necessary to deduct our total current liabilities from total current assets.
For example, we have $ 20000 total current assets in which cash, bank and inventory are included. We have $12000 total current liabilities. So, Net current assets is $ 8000 which we can use in our business.
Net current assets can be used for financial analysis. With this, we can calculateworking capital turnover ratio. We can also calculate net current assets value per share.
For example, we have $ 20000 total current assets in which cash, bank and inventory are included. We have $12000 total current liabilities. So, Net current assets is $ 8000 which we can use in our business.
Net current assets can be used for financial analysis. With this, we can calculateworking capital turnover ratio. We can also calculate net current assets value per share.
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