Which term is defined as fixed assets plus net current assets?

Which term is defined as fixed assets plus net current assets?

• A. Capital
• B. Net Current Assets/Working Capital
• C. Net Assets
• D. Current Assets

Answer: (C)

Net assets is the total resources a business uses, combining long‑term assets with working capital. It is defined as fixed assets plus net current assets (net current assets = current assets minus current liabilities). So adding fixed assets to the net amount available after covering short‑term obligations gives the overall net resources the business has, often called capital employed. For example, if fixed assets are 100k, current assets are 60k and current liabilities are 20k, net current assets are 40k, giving net assets of 140k. Net current assets/working capital covers only the short‑term liquidity (current assets minus current liabilities) and misses fixed assets, while current assets are just part of the asset base. Capital relates to funding, not the exact asset mix.

Net assets is the total resources a business uses, combining long‑term assets with working capital. It is defined as fixed assets plus net current assets (net current assets = current assets minus current liabilities). So adding fixed assets to the net amount available after covering short‑term obligations gives the overall net resources the business has, often called capital employed. For example, if fixed assets are 100k, current assets are 60k and current liabilities are 20k, net current assets are 40k, giving net assets of 140k.

Net current assets/working capital covers only the short‑term liquidity (current assets minus current liabilities) and misses fixed assets, while current assets are just part of the asset base. Capital relates to funding, not the exact asset mix.