How is working capital defined in a business context?

Working capital is defined as the amount of cash available to a business after it has paid its current liabilities. This measure is crucial for determining a company's short-term financial health and operational efficiency. It indicates whether a company has enough liquid assets to cover its obligations in the near term, which is essential for maintaining operations without disruptions.

In this context, working capital is typically calculated using the formula: Current Assets minus Current Liabilities. By focusing on the amount left after paying off liabilities, you gain insight into the company’s capacity to invest in its operations, pay employees, and manage other expenses. A positive working capital suggests that a company can fulfill its short-term debts and obligations, while negative working capital might indicate financial trouble.

The other options do not accurately reflect the definition of working capital. Total cash before expenses does not account for expenses and liabilities. Accrued income refers to revenue earned but not yet received, while the total number of assets does not relate directly to liquidity and cash available for immediate use. Therefore, the selection that outlines working capital as the amount of cash available after paying liabilities accurately captures its intent and significance in business operations.