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Net Working capital and Current Ratio are two facets of one coin. Do you agree ?

Accounting Cost Accounting Financial Reporting Financial Accounting Financial Management
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Question added by Deleted user
Date Posted: 2014/09/17
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georgei assi
by georgei assi , مدير حسابات , المجموعة السورية

Current Ratio (Current Ratio) Method of calculation: current assets / current liabilities    Working Capital (Working Capital) Method of calculation: current assets - current liabilities We find that the percentage of trading reflects the ability of the company's assets traded on cover short-term obligations. The company's assets in order to ensure their commitments in all cases, whether in borrowing or liquidation, The working capital is the expression of the company's ability to finance its daily operations and to meet short-term obligations. Note that they actually Haan of the same coin

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Current Ratio = Current Assets /Current Liabilities

Working Capital = Current Assets - Current liabilities

The purpose of Calculation almost works the same purpose and hence it is meaningful to interpret the same as mentioned above as: Both are two facets of one coin.

mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Yes it is two facets of one coin 

It measure liquidity and ability to pay shortterm obligations 

Current assets -  / current liabilities 

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

Yes I agree 

 

Both are two facets of one coin.

Khan Sohal khan
by Khan Sohal khan , Associate , State Street Syntel Services Pvt Ltd.

yes it is.

Khaled Mohee Eldeen Abbas Mahmoud
by Khaled Mohee Eldeen Abbas Mahmoud , Chartered Accountant # 10465 , Self-employed

yes, I do agree

Working capital and the current ratio measure the liquidity of your business - its ability to meet short-term debt with current assets.

 

Together, these are two of the most common measures of financial strength. The current ratio shows whether a company has sufficient access to cash to continue operations after paying off current liabilities. Working capital is the dollar amount by which current assets exceed current liabilities.

Tanveer Qureshi
by Tanveer Qureshi , Qureshi Associates , Qureshi Associates

Agreed.

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