Define working capital and why is it critical for startups.

Define working capital and why is it critical for startups.

• A. Working capital = total assets minus total liabilities; it's critical for tax planning.
• B. Working capital = current assets minus current liabilities; it's critical for day-to-day liquidity.
• C. Working capital = cash on hand; it's critical for investor confidence.
• D. Working capital = long-term assets minus long-term liabilities; it's critical for venture valuation.

Answer: (B)