Total assets minus current liability is equal to a company's

Explanation

To understand the answer to this question, let's break it down step by step.

Total assets refers to all the valuable resources that a company owns. These can include things like cash, inventory, buildings, and equipment.

Current liabilities, on the other hand, are the company's debts or obligations that are due within a short period of time, usually within a year. Examples of current liabilities can be loans, accounts payable, or wages payable.

Now, the question is asking what we get when we subtract the current liabilities from the total assets. In other words, we are calculating the value left over after we have paid off all the short-term debts.

The correct answer to this question is capital employed. Capital employed refers to the total amount of money that a company has invested in its business operations. It includes both the company's equity (the amount invested by the owners) and long-term debts.

By subtracting the current liabilities from the total assets, we are essentially removing the short-term debts from the company's total value. This leaves us with the capital employed, which represents the long-term investment in the business.

So, in summary, when we subtract the current liabilities from the total assets, we get the capital employed of a company. This is the amount of money that the company has invested in its business operations, including both the owners' equity and long-term debts.

Remember, it's important in commerce to understand how to calculate and interpret financial terms like total assets, current liabilities, and capital employed. These concepts help us analyze a company's financial health and make informed business decisions.

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