What defines the relationship between assets and liabilities in a positive working capital scenario?

A positive working capital scenario is characterized by a situation where a company's current assets are greater than its current liabilities. This indicates that the company has sufficient short-term assets, such as cash, accounts receivable, and inventory, to cover its short-term obligations. Having assets that exceed liabilities suggests financial health and stability, as it allows the company to meet its obligations and potentially invest in growth opportunities.

In this context, the option indicating that assets exceed liabilities clearly summarizes the essence of positive working capital. This positive relationship provides assurance to creditors and investors that the organization is capable of sustaining its operations and managing its financial commitments effectively. A healthy working capital position is essential for maintaining liquidity, facilitating operational efficiency, and supporting future financial planning.