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Distinguish between gross working capital and net...
1.
Distinguish between gross working capital and net working capital.
Answer»
Gross Working Capital
Net 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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