Question

Distinguish between gross working capital and net working capital.

Answer 1

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.