1.

Distinguish between gross working capital and net working capital.

Answer»
Gross Working CapitalNet Working Capital
Gross working capital is the sum of current assets of a company and does not account for current liabilities.Networking capital is the difference between current assets and current liabilities. Net Working Capital = Current Assets Current Liabilities
It does not take into account the liabilities of the company and as such is not a true indicator of the financial health of a company.It reflects operational efficiency and the ability to generate more sales.


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