The correct answer is: Temporary working capital.
Working capital is a measure of a company’s liquidity and efficiency. It is calculated by subtracting current liabilities from current assets. Current assets are assets that are expected to be converted into cash within one year, such as cash, accounts receivable, and inventory. Current liabilities are liabilities that are due within one year, such as accounts payable and short-term debt.
Temporary working capital is the amount of current assets that varies with seasonal requirements. For example, a retailer may have more inventory on hand during the holiday season than during other times of the year. This additional inventory is considered temporary working capital because it will be sold and converted into cash within a few months.
Permanent working capital is the amount of current assets that is needed to operate the business on a day-to-day basis. This includes items such as cash, accounts receivable, and inventory that are needed to support the company’s sales and operations.
Net working capital is the difference between current assets and current liabilities. It is a measure of a company’s liquidity and ability to meet its short-term obligations. A positive net working capital indicates that a company has more current assets than current liabilities, which is a good sign. A negative net working capital indicates that a company has more current liabilities than current assets, which is a sign of financial difficulty.
Gross working capital is the total of all current assets. It is a broader measure of liquidity than net working capital, but it does not take into account the company’s current liabilities.