Which of the following is a calculation for working capital?

Working capital is a financial metric that represents the difference between a company's current assets and current liabilities. It is an important measure of a business's short-term liquidity and operational efficiency.

When calculating working capital, you take the total amount of current assets, which includes cash, accounts receivable, and inventory, and subtract the total amount of current liabilities, which encompasses obligations that are due within one year, such as accounts payable and short-term debt. This calculation reveals how much capital is available to the business for its day-to-day operations after covering its short-term liabilities.

This method of calculation is crucial for businesses as it helps them to assess their ability to meet short-term obligations and manage their operational costs effectively. A positive working capital indicates that a company has enough assets to cover its current liabilities, whereas negative working capital might signal financial trouble.

The other options presented do not correctly reflect the calculation for working capital, as they either sum current liabilities and assets, consider total assets and liabilities, or divide current assets by current liabilities, which are not relevant to the standard working capital formula.