Excess of ‘Current Assets’ over ‘Current Liabilities’ is known as:

Correct option is B

The excess of Current Assets over Current Liabilities is termed as Net Working Capital (NWC).
It represents the liquidity buffer available to a business after meeting its short-term obligations. Formula:
Net Working Capital = Current Assets - Current Liabilities
If Current Assets exceed Current Liabilities, the firm has positive Net Working Capital, indicating good short-term financial health and ability to meet day-to-day operations smoothly.
Thus, the correct answer is (b) Net Working Capital.
Information Booster
1. Current Assets include cash, debtors, inventory, short-term investments, prepaid expenses.
2. Current Liabilities include creditors, bills payable, short-term loans, outstanding expenses.
3. Positive NWC ensures smooth operations, better creditworthiness, and liquidity.
4. Negative NWC may indicate liquidity issues and potential insolvency risk.
5. Working capital management aims to maintain an optimal level of current assets and liabilities.
Additional Information
· (a) Net Fixed Capital: Represents investment in fixed assets, not related to current assets or liabilities.
· (c) Gross Fixed Capital: Total investment in fixed assets before depreciation; unrelated to liquidity.
· (d) Gross Working Capital: Refers to total current assets, not the difference between current assets and liabilities.