What does Working Capital represent for a business?

Working Capital represents the difference between a company's current assets and its current liabilities, essentially reflecting the liquidity available to a business for its day-to-day operations. It indicates the cash flow available to meet immediate financial obligations, which is essential for managing operational expenses such as paying suppliers, employees, and other short-term debts.

When we view Working Capital in the context of the provided answer, it is correct because it directly relates to the available cash or assets that can quickly be converted to cash to cover operational needs. Having sufficient Working Capital ensures that a business can function smoothly without interruptions due to cash shortages.

The other options do not accurately describe Working Capital. Option A refers to net profit, which is a measure of a company's profitability over a specific period rather than its current financial liquidity. Option C mentions total liabilities, which indicates the total debts a company holds rather than its operational liquidity. Option D discusses gross income, which is a financial measure representing total revenue before any expenses or taxes are deducted, again failing to capture the essence of Working Capital as it pertains to immediate cash availability for business operations.