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FINANCIAL MANAGEMENT — OCM STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MANAGEMENT3 Marks
Question
Distinguish between :
Gross working capital and net working capital
✓

Answer

BasisGross Working CapitalNet Working Capital
MeaningTotal investment in current assets.Difference between current assets and current liabilities.
CalculationSum of all current assets (cash, inventory, receivables, etc.)Current Assets – Current Liabilities
PurposeShows the total funds invested in short-term assets.Indicates the liquidity position and the ability to meet short-term obligations.
Summary:
Gross working capital is the total current assets, whereas net working capital is the excess of current assets over current liabilities.

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